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See detailInventory control in a multi-supplier system
Arda, Yasemin ULg; Hennet, Jean-Claude

in International Journal of Production Economics (2006), 104

An enterprise network is analyzed from the viewpoint of an end-product manufacturer who receives customer orders and organises his production and supply policy so as to minimize the sum of his average ... [more ▼]

An enterprise network is analyzed from the viewpoint of an end-product manufacturer who receives customer orders and organises his production and supply policy so as to minimize the sum of his average holding cost and average stockout cost. For each main component to be ordered, the producer has several possible suppliers. The arrivals of customers’ orders are random and delivery times from suppliers are also supposed random. This supply system is represented as a queuing network where the producer uses a base-stock inventory control policy that keeps constant the inventory position level (current inventory level+pending replenishment orders). The decision variables are the reference inventory position level and the percentages of orders sent to the different suppliers. In the queuing network model, the percentages of orders are implemented as Bernoulli branching parameters. A close-form expression of the expected cost criterion is obtained as a complex non-linear function of decision variables. A decomposed approach is proposed for solving the optimization problem in an approximate manner. The quality of the approximate solution is evaluated by comparison to the exact solution, which can be computed numerically in some simple cases, in particular in the two-supplier case. Numerical applications show the important economic advantage for the producer of sending orders to several suppliers rather than to a single one. [less ▲]

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See detailCapacity utilisation and profitability: A decomposition of short-run profit efficiency
Coelli, Tim; Grifell-Tatjé, Emili; Perelman, Sergio ULg

in International Journal of Production Economics (2002), 79

The principal aim of this paper is to measure the amount by which the profit of a multi-input, multi-output firm deviates from maximum short-run profit, and then to decompose this profit gap into ... [more ▼]

The principal aim of this paper is to measure the amount by which the profit of a multi-input, multi-output firm deviates from maximum short-run profit, and then to decompose this profit gap into components that are of practical use to managers. In particular, our interest is in the measurement of the contribution of unused capacity, along with measures of technical inefficiency, and allocative inefficiency, in this profit gap. We survey existing definitions of capacity and, after discussing their shortcomings, we propose a new ray economic capacity measure that involves shortrun profit maximisation, with the output mix held constant. We go on to describe how the gap between observed profit and maximum profit can be calculated and decomposed using linear programming methods. The paper concludes with an empirical illustration, involving data on 28 international airline companies. The empirical results indicate that these airline companies achieve profit levels which are on average US$815m below potential levels, and that 70% of the gap may be attributed to unused capacity. [less ▲]

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