Abstract: In this paper, we consider information revelation mechanism designing of a supply
chain consisting of one manufacturer and one supplier under partial forecast updates,
respectively. The manufacturer with private information on its operations cost low or high
type procures one critical component from the supplier who requires the manufacturer to
reserve the capacity under demand uncertainty. We design a menu of reservation contracts to
induce the manufacturer to reveal its cost information truthfully. We try to explore the
effects of the forecast update on the information revelation mechanism. The greater amount of
forecast update weakens the supplier’s motivation to use information revelation
mechanism. The benefit from using revelation mechanism decreases in the unit salvage value
of unused capacity and critical component and unit shortage cost, however, increases in the unit
capacity investment cost and demand variance.
4. Assessing outsourcing cost-effectiveness
using fuzzy multiple goal programming approach
Earl-Juei Wang National Pingtung University of Science and Technology,
Chun-Yu Lin National Pingtung University of Science and Technology
Abstract: This work elucidates the relationship between capacity planning and suppliers with a
focus on quantity allocation, manufacturing quantity, capacity limit, warehouse space, and
time period for the specific production planning. Fuzzy multiple goal programming approach is
adopted to model total cost, holding cost, and rework cost in order to analyze the relative cost-
effectiveness of different factors. The proposed model of cost-effectiveness accommodates
variables such as multiple components, quality, and responsiveness, and integrates multi-stage
functions. Various scenarios are designed to analyze the transaction options for outsourcing
under combined schemes. The analytical results can help decision makers to systematically
analyze the cost effectiveness of outsourcing during capacity planning.
SESSION 1 M4024 January 3, 2013 11:00 – 12:30
Supply Uncertainty and Disruption Management
Session Chair: Sang Hwa Song University of Incheon
1.
Facilities and Routes Disruption Recovery Management
Lindong Liu HKUST, Xiangtong Qi HKUST
Abstract: In this work, we consider two disruption recovery problems. Firstly, we
investigate a facility recovery scheduling problem to minimize the total weighted waiting
time. A backward heuristic algorithm and a heuristic algorithm based on Lagrangian
Relaxation method are developed. Secondly, we consider a resource assignment problem to
minimize the total weighted delivery cost. A Lagrangian heuristic algorithm is developed.
Furthermore, we will investigate the situation where recovery activities involve multiple
decision makers, and a good cost share allocation is computed for this combinatorial
cooperative game. Computational experiments are carried out to analyze the performance of
these algorithms. 2.
Model and algorithms for optimized post- disaster relief distribution
Haijun Wang Huazhong University of Science and Technology,
Lijing Du Huazhong University of Science and Technology
Abstract: The effective distribution of critical supplies in post disaster plays a crucial role for
rescue operations, especially, in fatal natural disasters. The location of distribution centers
and vehicle routing in the available transportation network are two of the
challenging issues in emergency logistics. This paper constructs a location-routing model for
relief distribution problem with multiple conflicting objectives by considering travel time,
the total cost, and reliability. The improved non- dominated sorting differential evolution
algorithm is introduced to solve the proposed model. Case studies based on the 2008
Wenchuan earthquake in China are presented to demonstrate the approach and its application in
practice. 3.
The Value of Information on Supply Uncertainty
Sang Hwa Song University of Incheon, Taesu Cheong National University of
Singapore, Jaegon Kim University of Incheon
Abstract: As supply chains go global and outsourcing becomes prevalent in manufacturing
and logistics, companies face new challenge of managing unreliable supply source that may fail
to supply enough quantities mainly due to random yield. In this paper, we first understand
the value of information on supply uncertainty with numerical experiments, and then explore
the trade-off between supply reliability improvement and the total expected profits. In
regards to the value of supply risk information, we consider three different scenarios no
information, partial information and full information on random supply loss and see how
the degree of understanding on the supply uncertainty can affect the optimal decisions and
the overall system performance. We also explore the existence of a stochastic order in supply
reliability that guarantees the monotonic results in the expected profits while stochastically
improved performance may not necessarily result in the overall profit improvement in
general. 4.
Contingency Planning in the Formation of a Supply Chain
Renato de Matta University of Iowa
Abstract: With today’s growing number of geographically dispersed facilities amplifying
the likelihood of supply disruptions, contingency planning has become an important strategic
issue for manufacturers and distributors. Contingency planning involves the additional
investment in production capacity to mitigate the adverse effects of supply disruption. It also find
ways to employ the capacity that is on stand by for productive uses. We formulate a network
design optimization model for supply chain contingency planning. We develop an efficient
Benders decomposition-based solution procedure which exploits the natural partition
between the logistics and pricing decisions in a global supply chain problem. Computational
results are presented.
SESSION 2 M4001 January 3, 2013 14:00 – 15:30
Green Supply Chain Session Chair: Zhaowei Miao Xiamen
University
1. Modeling decision processes of a green
