Evaluating the lifetime performance index for the exponential lifetime products

Process capability indices (PCIs) are used to measure process potential and performance. Since the lifetime of products generally may possess an exponential, gamma or Weibull distribution, etc., so under a two-parameter exponential distribution, this study constructs a uniformly minimum variance unbiased estimator (UMVUE) of the lifetime performance index based on the right type II censored sample. Then the UMVUE of the lifetime performance index is utilized to develop the new hypothesis testing procedure in the condition of known L. Finally, a practical example is illustrated to employ the testing procedure to determine whether the process is capable.     

Evaluating the performance of Swedish savings banks according to service efficiency

This article develops principles for an evaluation of the efficiency of a savings bank. It starts out from the observation that such a bank is less profit oriented than a commercial bank. The customer is a vital stakeholder to the savings bank implying a greater emphasis on customer service provision. We are using data envelopment analysis (DEA) as a method to consider the service orientation of savings banks. We thereby demonstrate how an evaluation of the performance of savings banks according to “service efficiency” differs from an evaluation based on the traditional “profit” or shareholder concept. We determine the number of Swedish savings banks being “service efficient” as well as the average degree of service efficiency in this industry.     

Competitive diffusion process of repurchased products in knowledgeable manufacturing

This paper presents a diffusion model to explain the competitive diffusion of the repurchased products in knowledgeable manufacturing. The acute market competition accelerates the products’ improvement, which requires that the manufacturing enterprises be highly capable of rapid reaction by means of knowledgeable manufacturing. To forecast the diffusion behavior effectively enables the realization of knowledgeable manufacturing system (KMS) which targets T (time), Q (quality), C (cost), S (service), and E (environment). Various diffusion models have emerged since Bass model was firstly proposed in 1969. A nonlinear model of the repurchased competitive products is proposed on the basis of the product diffusion analysis. By taking the frequently purchased products as example, the stability of the model is examined in light of the qualitative theory of differential equations and proved by the approximate linearization method. As the qualitative analysis reveals, between the two frequently purchased products competing in the same market, one undoubtedly occupies a fixed market share while the other may finally be eliminated from the market. A special case of the problem is that both products are one-time-purchased. With the corresponding model given, the qualitative analysis shows that either of the products occupies a market share, the size of which is determined by the product’s competitive strength and the new product’s time-to-market. A system dynamics model is then established and simulated by vensim. The result is consistent with that of the qualitative analysis.     

Chapter 11 Simulation studies of efficiency,returns to scale and misspecification with nonlinear functions in DEA

Using statistically designed experiments, 12,500 observations are generated from a 4-pieced Cobb-Douglas function exhibiting increasing and decreasing returns to scale in its different pieces. Performances of DEA and frontier regressions represented by COLS (Corrected Ordinary Least Squares) are compared at sample sizes ofn=50, 100, 150 and 200. Statistical consistency is exhibited, with performances improving as sample sizes increase. Both DEA and COLS generally give good results at all sample sizes. In evaluating efficiency, DEA generally shows superior performance, with BCC models being best (except at corner points), followed by the CCR model and then by COLS, with log-linear regressions performing better than their translog counterparts at almost all sample sizes. Because of the need to consider locally varying behavior, only the CCR and translog models are used for returns to scale, with CCR being the better performer. An additional set of 7,500 observations were generated under conditions that made it possible to compare efficiency evaluations in the presence of collinearity and with model misspecification in the form of added and omitted variables. Results were similar to the larger experiment: the BCC model is the best performer. However, COLS exhibited surprisingly good performances — which suggests that COLS may have previously unidentified robustness properties — while the CCR model is the poorest performer when one of the variables used to generate the observations is omitted.     

Disruption management of the vehicle routing problem with vehicle breakdown

This paper introduces a new class of problem, the disrupted vehicle routing problem (VRP), which deals with the disruptions that occur at the execution stage of a VRP plan. The paper then focuses on one type of such problem, in which a vehicle breaks down during the delivery and a new routing solution needs to be quickly generated to minimise the costs. Two Tabu Search algorithms are developed to solve the problem and are assessed in relation to an exact algorithm. A set of test problems has been generated and computational results from experiments using the heuristic algorithms are presented.     

Tactical level planning in float glass manufacturing with co-production,random yields and substitutable products

We investigate tactical level planning problems in float glass manufacturing. Float glass manufacturing is a process that has some unique properties such as uninterruptible production, random yields, partially controllable co-production compositions, complex relationships in sequencing of products, and substitutable products. Furthermore, changeover times and costs are very high, and production speed depends significantly on the product mix. These characteristics render measurement and management of the production capacity difficult. The motivation for this study is a real life problem faced at Trakya Cam in Turkey. Trakya Cam has multiple geographically separated production facilities. Since transportation of glass is expensive, logistics costs are high. In this paper, we consider multi-site aggregate planning, and color campaign duration and product mix planning. We develop a decision support system based on several mixed integer linear programming models in which production and transportation decisions are made simultaneously. The system has been fully implemented, and has been in use at Trakya Cam since 2005.     

Evaluating the information content of a measure of plant output: An application to high-technology manufacturing

Commonly used measures of plant output have been criticized for their inability to provide information required to manage the dynamic operations of high-technology manufacturing plants. In this paper, we propose tests to evaluate the information content of a measure of plant output that is specifically directed at these issues. These tests are based on recent developments in DATA Envelopment Analysis (DEA), namely the Cone Ratio Envelopments. In this new application of DEA models, we shift the focus from Decision Making Units (DMUs) being evaluated to the DMUs that are being used to effect evaluations. The proposed tests are applied to evaluate the information contnet of a complexity adjusted measure of plant output, which we refer to as Total Net Die Equivalent (TNDE). Developed recently in the context of a high-technology manufacturing plant—a wafer fabrication plant of a merchant semiconductor manufacturing company-TNDE reflects the ongoing changes in product and process technologies, process flow characteristics, and volume of production. Evaluating the information content on joint criteria of recency and efficiency, the results of our tests, conducted over a 28-month period in the wafer fabrication plant,show that TNDE as a single aggregate (scalar) measure of plant output outperforms the two outputs from which it is synthesized. Thus, TNDE as a single measure of output can be used to provide an improved basis for planning a plant's future operations. En route to the development and application of the proposed tests, we illustrate how DEA concepts and models provide a rigorous and systematic basis for conducting ex post technology evaluation to guide continuous improvements in a plant's current operations.     

Pricing decisions for complementary products with firms’ different market powers

This article reports the results of a study that explores the pricing problems with regard to two complementary products in a supply chain with two manufacturers and one common retailer. The authors establish five pricing models under decentralized decision cases, including the MS-Bertrand, MS-Stackelberg, RS-Bertrand, RS-Stackelberg, and NG models, with consideration of different market power structures among channel members. By applying a game-theoretical approach, corresponding analytic solutions are obtained. Then, by comparing the maximum profits and optimal pricing decisions obtained in different decision cases, interesting and valuable managerial insights are established.     

Measuring energy efficiency in the context of an emerging economy: The case of indian manufacturing

In recent years the Indian economy has achieved a rapid growth rate. However, one of the challenges facing the economy is the large energy supply that would be needed to sustain this growth path. Hence attaining energy efficiency is crucial for the economy. This paper examines the Indian manufacturing sector and utilizes a variant of the directional distance function to obtain comprehensive measures of performance of the major manufacturing states, given the joint goals of achieving energy conservation and output growth. The results of the empirical application reveal that given the prevailing technology, the average manufacturing firm across the states could reduce energy input and increase output simultaneously by an annual average of 3.84%, by improving technical efficiency. To accommodate a larger simultaneous increase in output and reduction in energy use, India should adopt superior technologies so as to shift the efficient frontier outward.     

An efficiency frontier approach for the design of cellular manufacturing systems in a lumpy demand environment

A new multi-objective approach for the cell formation problem in a lumpy demand environment is presented. The objectives addressed in this paper are grouping efficiency and capacity requirements. In lumpy demand the required capacity is affected by demand variability and the correlation between the part types assigned to the cells. We claim that since the required capacity is determined by part types grouping, part type demands variability and their correlation should be taken into consideration as part of the cell formation. This new approach is discussed and formulated as a mixed integer programming model and illustrated by a wide range of typical examples. These examples demonstrate that when using traditional approaches designers do not obtain optimal solutions and may make decisions on the basis of wrong results. The proposed approach helps designers eliminate these problems and produce a reasonable cell design. A genetic algorithm is proposed and examined for designing large-scale systems.     

Comparison of efficiency among different techniques to avoid order reduction with Strang splitting

In this article, we offer a comparison in terms of computational efficiency between two techniques to avoid order reduction when using Strang method to integrate nonlinear initial boundary value problems with time‐dependent boundary conditions. We see that it is important to consider an exponential method for the integration of the linear nonhomogeneous and stiff part in the technique by Einkemmer et al. so that the latter is comparable in efficiency with that suggested by Alonso et al. Some other advantages of the technique suggested by Alonso et al. are stated in the conclusions.     

Chapter 9 Moving frontier analysis: An application of Data Envelopment Analysis for competitive analysis of a high-technology manufacturing plant

Competitive analysis of plants is fundamental to enhancing the competitiveness of manufacturing firms. Moving Frontier Analysis (MFA), proposed in this paper, is a new application of Data Envelopment Analysis (DEA) to conduct competitive analysis of a high-technology manufacturing plant. The development and application of MFA was done in collaboration with the management of a US merchant semiconductor manufacturing firm. A wafer fabrication plant of the firm served as the research site for this study. MFA provides a means to determine (i) the gap between a plant's best performance and the best of competition, and (ii) whether or not it will be possible to close this performance gap, and if so, the time it will take to do so. From an implementation standpoint, competitive analysis using MFA can be conducted even if (i) accurate and detailed data on comparable plants of competitor companies are not available, and (ii) the operations of competitors' plants are dynamically changing. An application of MFA for conducting competitive analysis of the wafer fabrication plant is presented. This application illustrates how MFA makes it possible to estimate (i) the unit cost of production for the best of competitors' plants using aggregate operational information on industry best practices, and (ii) the time it will take for the plant's unit cost of production to catch up with the best of competition using the technologies in operation.     

The vehicle routing and scheduling problem with cross-docking for perishable products under uncertainty: Two robust bi-objective models

This paper presents a bi-objective MILP model for the vehicle routing and scheduling problem with cross-docking for perishable products. It is demonstrated that considering merely one objective sacrifices the other one and that the L₁ metric method makes a suitable trade-off. Two robust models are developed when the travel time of the outbound vehicles and the freshness-life of the products are uncertain. The results show that the effect of the appearing uncertainty in the travel time on the deterioration of the objectives is higher than the effect of the freshness-life of the products, and using the proposed model, the freshness of the delivered products increases by 74.14% on average without increasing the distribution cost, which can decrease the waste.     

Relation between vehicle routing problems: an insertion heuristic for the vehicle routing problem with simultaneous delivery and pick-up applied to the vehicle routing problem with backhauls

Recently, an increasing number of papers on vehicle routing problems with backhauling has been published. Different types of backhauling problems are discussed. Two of them—the vehicle routing problem with backhauls and so-called ‘mixed loads’ (VRPBM) and the vehicle routing problem with simultaneous delivery and pick-up (VRPSDP)—are closely related. In this paper, we discuss that relationship. Our findings are that previously published results for VRPSDP instances obtained by using a heuristic suggested for the VRPBM do not take into account specific properties of the VRPSDP. As a result of the analysis of the relation between both problem types the possibility of solving the VRPBM by applying an insertion heuristic based on the concept of ‘residual capacities’ originally designed for the VRPSDP is investigated. Numerical results indicate that, for certain instances, this approach is more favourable than the application of a heuristic suggested for the VRPBM in the literature.     

A unified exact method for solving different classes of vehicle routing problems

This paper presents a unified exact method for solving an extended model of the well-known Capacitated Vehicle Routing Problem (CVRP), called the Heterogenous Vehicle Routing Problem (HVRP), where a mixed fleet of vehicles having different capacities, routing and fixed costs is used to supply a set of customers. The HVRP model considered in this paper contains as special cases: the Single Depot CVRP, all variants of the HVRP presented in the literature, the Site-Dependent Vehicle Routing Problem (SDVRP) and the Multi-Depot Vehicle Routing Problem (MDVRP). This paper presents an exact algorithm for the HVRP based on the set partitioning formulation. The exact algorithm uses three types of bounding procedures based on the LP-relaxation and on the Lagrangean relaxation of the mathematical formulation. The bounding procedures allow to reduce the number of variables of the formulation so that the resulting problem can be solved by an integer linear programming solver. Extensive computational results over the main instances from the literature of the different variants of HVRPs, SDVRP and MDVRP show that the proposed lower bound is superior to the ones presented in the literature and that the exact algorithm can solve, for the first time ever, several test instances of all problem types considered.      

Number of alternatives and efficiency in different types of top-management decisions

What are the causes of the efficiency of complex strategic decisions? To answer this question, the impact of information searching, alternative designing, and complexity of a decision problem on its decision quality are analyzed in a longitudinal study of 83 top-management decisions, made the by executive board of a medium-sized firm (1380 employees). Decision quality is negatively influenced by the complexity of the decision problem. Alternative designing has a strong positive impact on decision quality. Information search shows no significant relationship to decision quality. The results indicate that designing of alternatives is an important instrument to counter the challenges of complex strategic decision-problems. However, one should not simply maximize the number of alternatives. There seems to be a very small optimal number beyond which decision quality will decrease. Besides, alternative designing has to be coordinated with other problem-solving activities, namely goal formation, process organization, and information searching.     

On products with the unit interval

We investigate the question which compact convex sets are homeomorphic to their product with the unit interval. We prove it in particular for the space of probability measures on any infinite scattered compact space and for the half-ball of a non-separable Hilbert space equipped with the weak topology. We also show examples of compact spaces for which it is not the case.