Make-or-buy service capacity decision in a supply chain providing after-sales service

We consider a supply chain comprising a manufacturer and a retailer. The manufacturer supplies a product to the retailer, while the retailer sells the product bundled with after-sales service to consumers in a fully competitive market. The sales volume is affected by the retailer’s service-level commitment. The retailer can build service capacity in-house at a deterministic price before service demand is realized, or buy the service from an outsourcing market at an uncertain price after service demand realization. We find that the outsourcing market encourages the retailer to make a higher level of service commitment, while prompting the manufacturer to reduce the wholesale price, resulting in more demand realization. We analyze how the expected cost of the service in the outsourcing market and the retailer’s risk attitude affect the decisions of both parties. We derive the conditions under which the retailer is willing to build service capacity in-house and under which it will buy the service from the outsourcing market. Moreover, we find that the manufacturer’s sharing with the retailer the cost to build service capacity improves the profits of both parties.     

Coordinating the supply chain in the agricultural seed industry

This paper examines contract practices between suppliers and retailers in the agricultural seed industry. We construct and analyze single-retailer models of various contract types actually used in the industry, which include, for example, certain “bonus” and “penalty” features. With no assumption on the demand distribution, we establish sufficient conditions for contract parameters to guarantee supply chain coordination. Under the assumption of uniform demand, we fully characterize all coordinating contracts. In addition, we compare the models studied herein with other models in the literature and demonstrate that current behavior in the agricultural seed industry is substantively different than that captured by other models. Conversely, we argue why other existing models are not reasonable to implement in the agricultural seed industry.     

Closed-loop supply chain network equilibrium under legislation

This paper expands previous work dealing with oligopolistic supply chains to the field of closed-loop supply chains. The model presented has been formulated with the intent of examining issues surrounding the recent European Union directive regarding waste of electric and electronic equipment (WEEE). The network modelled consists of manufacturers and consumer markets engaged in a Cournot pricing game with perfect information. Closed-loop supply chain network equilibrium occurs when all players agree on volumes shipped and prices charged. Certain properties of the model are examined analytically. Numeric examples are included and have been solved using an extragradient method with constant step size. The equilibrium solution obtained provide interesting insights that lead into a number of areas for future research.     

Modeling cooperation on a class of distribution problems

In this paper we study models of cooperation between the nodes of a network that represents a distribution problem. The distribution problem we propose arises when, over a graph, a group of nodes offers certain commodity, some other nodes require it and a third group of nodes neither need this material nor offer it but they are strategically relevant to the distribution plan. The delivery of one unit of material to a demand node generates a fixed profit, and the shipping of the material through the arcs has an associated cost. We show that in such a framework cooperation is beneficial for the different parties. We prove that the cooperative situation arising from this distribution problem is totally balanced by finding a set of stable allocations (in the core of an associated cooperative game). In order to overcome certain fairness problems of these solutions, we introduce two new solution concepts and study their properties.     

The use of a premium-payment scheme in a supply chain involving capacity acquisition

We study a practice whereby a downstream firm makes to his supplier a premium-payment for a certain quantity of products. We show that the adoption of this practice can induce the supplier to build bigger capacity. The higher capacity level enables the supplier to satisfy a larger portion of demands from the downstream firm, and this leads to higher payoffs for both parties in the supply chain. With the assistance of an under-capacity penalty imposed on the supplier, this premium-payment scheme can help lure the parties into taking the channel-optimal actions. Our numerical examples help reveal various features of the scheme.     

Recent optimization models and trends in location,relocation, and dispatching of emergency medical vehicles

Over the past 10 years, a considerable amount of research has been devoted to the development of models to support decision making in the particular yet important context of Emergency Medical Services (EMS). More specifically, the need for advanced strategies to take into account the uncertainty and dynamism inherent to EMS, as well as the pertinence of socially oriented objectives, such as equity, and patient medical outcomes, have brought new and exciting challenges to the field. In this context, this paper summarizes and discusses modern modeling approaches to address problems related to ambulance fleet management, particularly those related to vehicle location and relocation, as well as dispatching decisions. Although it reviews early works on static ambulance location problems, this review concentrates on recent approaches to address tactical and operational decisions, and the interaction between these two types of decisions. Finally, it concludes on the current state of the art and identifies promising research avenues in the field.     

Contract design and supply chain coordination in the electricity industry

In this article we propose a model of the supply chain in electricity markets with multiple generators and retailers and considering several market structures. We analyze how market design interacts with the different types of contract and market structure to affect the coordination between the different firms and the performance of the supply chain as a whole. We compare the implications on supply chain coordination and on the players’ profitability of two different market structures: a pool based market vs. bilateral contracts, taking into consideration the relationship between futures and spot markets. Furthermore, we analyze the use of contracts for differences and two-part-tariffs as tools for supply chain coordination. We have concluded that there are multiple equilibria in the supply chain contracts and structure and that the two-part tariff is the best contract to reduce double marginalization and increase efficiency in the management of the supply chain.     

Redesigning a warehouse network

To take advantage of economies of scale, a growing number of firms have begun to explore the possibility of integrating supply chain activities. The advent of such a possibility would necessitate the redesign of a warehouse network. Typically, a warehouse redesign problem involves the consolidation of regional warehouses into a fewer number of master stocking points and the subsequent phase-out of redundant or underutilized warehouses without deteriorating customer services. This paper develops a mixed-integer programming model to solve the warehouse redesign problem. The usefulness of the model was validated by its successful application to a real-world problem and by its sensitivity analyses when used with changing scenarios within a warehouse network configuration.     

OR in healthcare: A European perspective

The European Working Group “Operational Research Applied to Health Services” (ORAHS) is one of the domain specific EURO Working Groups organized by EURO - the European Association of Operational Research Societies. In this paper we report on the development of ORAHS as a platform for OR in health, and analyse the papers presented at meetings over the 35 years of its existence. We propose a two-way framework for analysis, where one dimension is the nine stages of the product life cycle: identifying consumer requirements, designing a new service to meet these requirements, forecasting demand for such a service, securing resources for it, allocating these resources, developing Programs & Plans to use these resources for delivering the service, establishing criteria for service delivery, managing the performance of the service, and finally, evaluating its performance. The other dimension is a three-level classification into broad application areas referring to processes at different levels in healthcare: Patients & Providers, Units & Hospitals, and Regional & National. We use this framework to carry out a quantitative analysis of all the papers presented during the meetings of ORAHS since its inception in 1975. We then describe developments over this period in applying OR approaches and techniques to healthcare, and present an overview of the main application areas and challenges.     

Literature review on multi-appointment scheduling problems in hospitals

This paper presents a review of the literature on multi-appointment scheduling problems in hospitals. In these problems, patients need to sequentially visit multiple resource types in a hospital setting so they can receive treatment or be diagnosed. Therefore, each patient is assigned a specific path over a subset of the considered resources and each step needs to be scheduled. The main aim of these problems is to let each patient visit the resources in his or her subset within the allotted time to receive timely care. This is important because a delayed diagnosis or treatment may result in adverse health effects. Additionally, with multi-appointment scheduling, hospitals have the opportunity to augment patient satisfaction, allowing the patient to visit the hospital less frequently. To structure the growing body of literature in this field and aid researchers in the field, a classification scheme is proposed and used to classify the scientific work on multi-appointment scheduling in hospitals published before the end of 2017. The results show that multi-appointment scheduling problems are becoming increasingly popular. In fact, multi-appointment scheduling problems in hospitals are currently gaining progressively more momentum in the academic literature.     

Quantitative models for sustainable supply chain management: Developments and directions

Sustainability, the consideration of environmental factors and social aspects, in supply chain management (SCM) has become a highly relevant topic for researchers and practitioners. The application of operations research methods and related models, i.e. formal modeling, for closed-loop SCM and reverse logistics has been effectively reviewed in previously published research. This situation is in contrast to the understanding and review of mathematical models that focus on environmental or social factors in forward supply chains (SC), which has seen less investigation. To evaluate developments and directions of this research area, this paper provides a content analysis of 134 carefully identified papers on quantitative, formal models that address sustainability aspects in the forward SC. It was found that a preponderance of the publications and models appeared in a limited set of six journals, and most were analytically based with a focus on multiple criteria decision making. The tools most often used comprise the analytical hierarchy process or its close relative, the analytical network process, as well as life cycle analysis. Conclusions are drawn showing that numerous possibilities and insights can be gained from expanding the types of tools and factors considered in formal modeling efforts.     

Discrete Conditional Phase-type models utilising classification trees: Application to modelling health service capacities

Discrete Conditional Phase-type models (DC-Ph) consist of a process component (survival distribution) preceded by a set of related conditional discrete variables. This paper introduces a DC-Ph model where the conditional component is a classification tree. The approach is utilised for modelling health service capacities by better predicting service times, as captured by Coxian phase-type distributions, interfaced with results from a classification tree algorithm. To illustrate the approach, a case-study within the healthcare delivery domain is given, namely that of maternity services. The classification analysis is shown to give good predictors for complications during childbirth. Based on the classification tree predictions, the duration of childbirth on the labour ward is then modelled as either a two or three-phase Coxian distribution. The resulting DC-Ph model is used to calculate the number of patients and associated bed occupancies, patient turnover, and to model the consequences of changes to risk status.     

Optimal patient and personnel scheduling policies for care-at-home service facilities

In this paper we study the problem of personnel planning in care-at-home facilities. We model the system as a Markov decision process, which leads to a high-dimensional control problem. We study monotonicity properties of the system and derive structural results for the optimal policy. Based on these insights, we propose a trunk reservation heuristic to control the system. We provide numerical evidence that the heuristic yields close to optimal performance, and scales well for large problem instances.     

SimLean: Utilising simulation in the implementation of lean in healthcare

Discrete-event simulation (DES) and lean are approaches that have a similar motivation: improvement of processes and service delivery. Both are being used to help improve the delivery of healthcare, but rarely are they used together. This paper explores from a theoretical and an empirical perspective the potential complementary roles of DES and lean in healthcare. The aim is to increase the impact of both approaches in the improvement of healthcare systems. Out of this exploration, the ‘SimLean’ approach is developed in which three roles for DES with lean are identified: education, facilitation and evaluation. These roles are demonstrated through three examples of DES in action with lean. The work demonstrates how the fusion of DES with lean can improve both stakeholder engagement with DES and the impact of lean.     

Staff optimization for time-dependent acute patient flow

The emergency department is a key element of acute patient flow, but due to high demand and an alternating rate of arriving patients, the department is often challenged by insufficient capacity. Proper allocation of resources to match demand is, therefore, a vital task for many emergency departments.Constrained by targets on patient waiting time, we consider the problem of minimizing the total amount of staff-resources allocated to an emergency department. We test a matheuristic approach to this problem, accounting for both patient flow and staff scheduling restrictions. Using a continuous-time Markov chain, patient flow is modeled as a time-dependent queueing network where inhomogeneous behavior is evaluated using the uniformization method. Based on this modeling approach, we recursively evaluate and allocate staff to the system using integer linear programming until the waiting time targets are respected in all queues of the network. By comparing to discrete-event simulations of the associated system, we show that this approach is adequate for both modeling and optimizing the patient flow. In addition, we demonstrate robustness to the service time distribution and the associated system with multiple classes of patients.     

Agricultural planning of annual plants under demand,maturation, harvest,and yield risk

In this study we present a planning methodology for a firm whose objective is to match the random supply of annual premium fruits and vegetables from a number of contracted farms and the random demand from the retailers during the planning period. The supply uncertainty is due to the uncertainty of the maturation time, harvest time, and yield. The demand uncertainty is the uncertainty of weekly demand from the retailers. We provide a planning methodology to determine the farm areas and the seeding times for annual plants that survive for only one growing season in such a way that the expected total profit is maximized. Both the single period and the multi period cases are analyzed depending on the type of the plant. The performance of the solution methodology is evaluated by using numerical experiments. These experiments show that the proposed methodology matches random supply and random demand in a very effective way and improves the expected profit substantially compared to the planning approaches where the uncertainties are not taken into consideration.     

Combining discrete-event simulation and system dynamics in a healthcare setting: A composite model for Chlamydia infection

This paper presents a composite model in which two simulation approaches, discrete-event simulation (DES) and system dynamics (SD), are used together to address a major healthcare problem, the sexually transmitted infection Chlamydia. The paper continues an on-going discussion in the literature about the potential benefits of linking DES and SD. Previous researchers have argued that DES and SD are complementary approaches and many real-world problems would benefit from combining both methods. In this paper, a DES model of the hospital outpatient clinic which treats Chlamydia patients is combined with an SD model of the infection process in the community. These two models were developed in commercial software and linked in an automated fashion via an Excel interface. To our knowledge this is the first time such a composite model has been used in a healthcare setting. The model shows how the prevalence of Chlamydia at a community level affects (and is affected by) operational level decisions made in the hospital outpatient department. We discuss the additional benefits provided by the composite model over and above the benefits gained from the two individual models.     

Coordination of cooperative cost-reduction efforts in a supply chain partnership

We study cooperative cost reduction in a decentralized supply chain with a single manufacturer and multiple suppliers. The manufacturer assembles components that are procured from the suppliers to produce a final product. Both the manufacturer and the suppliers invest in reducing the unit production costs of the components. We see that neither of the two well-known conventional contracts, the wholesale price contract and the cost-plus pricing contract, generally coordinates the supply chain, i.e., under both of these types of contract, the individual optimal cost-reduction efforts of players deviate from the centralized system-optimal solution. However, this result is not surprising because these contracts encourage either only the manufacturer or only the suppliers alone to invest in cost reduction.     

Modelling activities at a neurological rehabilitation unit

A queuing model of a specialist neurological rehabilitation unit is studied. The application is to the Neurological Rehabilitation Centre at Rookwood Hospital (Cardiff, UK), the national rehabilitation unit for Wales. Due to high demand this 21-bed inpatient facility is nearly always at maximum occupancy, and with a significant bed-cost per day this makes it a prime candidate for mathematical modelling. Central to this study is the concept that treatment intensity has an effect on patient length of stay. The model is constructed in four stages. First, appropriate patient groups are determined based on a number of patient-related attributes. Second, a purpose-built scheduling program is used to deduce typical levels of treatment to patients of each group. These are then used to estimate the mean length of stay for each patient group. Finally, the queuing model is constructed. This consists of a number of disconnected homogeneous server queuing systems; one for each patient group. A Coxian phase-type distribution is fitted to the length of time from admission until discharge readiness and an exponential distribution models the remainder of time until discharge. Some hypothetical scenarios suggested by senior management are then considered and compared on the grounds of a number of performance measures and cost implications.