scholarly journals Discounted costs and obsolescence with the Joint replenishment problem

Author(s):  
Ricardo Afonso ◽  
Pedro Godinho ◽  
João Paulo Costa

Real life inventory lot sizing problems are frequently challenged with the need to order different types of items within the same batch. The Joint Replenishment Problem (JRP) addresses this setting of coordinated ordering by minimizing the total cost, composed of ordering (or setup) costs and holding costs, while satisfying the demand. The complexity of this problem increases when some or all item types are prone to obsolescence. In fact, the items may experience an abrupt decline in demand because they are no longer needed, due to rapid advancements in technology, going out of fashion, or ceasing to be economically viable. This article proposes an extension of the Joint Replenishment Problem (JRP) where the items may suddenly become obsolete at some time in the future. The model assumes constant demand and the items’ lifetimes follow independent negative exponential distributions. The optimization process considers the time value of money by using the expected discounted total cost as the minimization criterion. The proposed model was applied to some test cases, and sensitivity analyses were performed, in order to assess the impact of obsolescence on the ordering policy. The increase in the obsolescence risk, through the progressive increase of the obsolescence rates of the item types, determines smaller lot sizes on the ordering policy. The increase in the discount rate causes smaller quantities to be ordered as well.

2020 ◽  
Vol 27 (9) ◽  
pp. 2135-2161
Author(s):  
Hessa Almatroushi ◽  
Moncer Hariga ◽  
Rami As'ad ◽  
AbdulRahman Al-Bar

PurposeThis paper proposes an integrated approach that seeks to jointly optimize project scheduling and material lot sizing decisions for time-constrained project scheduling problems.Design/methodology/approachA mixed integer linear programming model is devised, which utilizes the splitting of noncritical activities as a mean toward leveling the renewable resources. The developed model minimizes renewable resources leveling costs along with consumable resources related costs, and it is solved using IBM ILOG CPLEX optimization package. A hybrid metaheuristic procedure is also proposed to efficiently solve the model for larger projects with complex networks structure.FindingsThe results confirmed the significance of the integrated approach as both the project schedule and the material ordering policy turned out to be different once compared to the sequential approach under same parameter settings. Furthermore, the integrated approach resulted in substantial total costs reduction for low values of the acquiring and releasing costs of the renewable resources. Computational experiments conducted over 240 test instances of various sizes, and complexities illustrate the efficiency of the proposed metaheuristic approach as it yields solutions that are on average 1.14% away from the optimal ones.Practical implicationsThis work highlights the necessity of having project managers address project scheduling and materials lot sizing decisions concurrently, rather than sequentially, to better level resources and minimize materials related costs. Significant cost savings were generated through the developed model despite the use of a small-scale example which illustrates the great potential that the integrated approach has in real life projects. For real life projects with complex network topology, practitioners are advised to make use of the developed metaheuristic procedure due to its superior time efficiency as compared to exact solution methods.Originality/valueThe sequential approach, wherein a project schedule is established first followed by allocating the needed resources, is proven to yield a nonoptimized project schedule and materials ordering policy, leading to an increase in the project's total cost. The integrated approach proposed hereafter optimizes both decisions at once ensuring the timely completion of the project at the least possible cost. The proposed metaheuristic approach provides a viable alternative to exact solution methods especially for larger projects.


2013 ◽  
Vol 2013 ◽  
pp. 1-9 ◽  
Author(s):  
Wen-Tsung Ho

This work investigates the joint replenishment problem (JRP) involving multiple items where economies exist for replenishing several items simultaneously. The demand rate for each item is known and constant. Shortages are not permitted and lead times are negligible. Many heuristic algorithms have been proposed to find quality solutions for the JRP. In this paper, cycle time division and recursive tightening methods are developed to calculate an efficient and optimal replenishment policy for JRP. Two theorems are demonstrated to guarantee that an optimal solution to the problem can be derived using cycle time division and recursive tightening methods. Restated, cycle time division and recursive tightening methods theoretically yield the optimal solution in 100% of instances. The complexity of cycle time division and recursive tightening methods is justO(NlogN), whereNrepresents the number of items involved in the problem. Numerical examples are included to demonstrate the algorithmic procedures.


2008 ◽  
Vol 39 (8) ◽  
pp. 1307-1315 ◽  
Author(s):  
A. Cougnard ◽  
H. Verdoux ◽  
A. Grolleau ◽  
Y. Moride ◽  
B. Begaud ◽  
...  

BackgroundThe impact of antidepressant drug treatment (ADT) on the risk of suicide is uncertain. The aim of this study was to determine in a real-life setting whether ADT is associated with an increased or a reduced risk of suicide compared to absence of ADT (no-ADT) in patients with depression.MethodA decision analysis method was used to estimate the number of suicides prevented or induced by ADT in children and adolescents (10–19 years old), adults (20–64 years old) and the elderly (⩾65 years) diagnosed with major depression. The impact of gender and parasuicide history on the findings was explored within each age group. Sensitivity analyses were used to assess the robustness of the models.ResultsPrescribing ADT to all patients diagnosed with depression would prevent more than one out of three suicide deaths compared to the no-ADT strategy, irrespective of age, gender or parasuicide history. Sensitivity analyses showed that persistence in taking ADT would be the main characteristic influencing the effectiveness of ADT on suicide risk.ConclusionsPublic health decisions that contribute directly or indirectly to reducing the number of patients with depression who are effectively administered ADT may paradoxically induce a rise in the number of suicides.


Blood ◽  
2014 ◽  
Vol 124 (21) ◽  
pp. 1324-1324 ◽  
Author(s):  
Carolina Reyes ◽  
Gregory Gazauskas ◽  
Ursula Becker ◽  
Santiago Moreno ◽  
David L. Veenstra

Abstract Background Two recently approved therapies for previously untreated chronic lymphocytic leukemia (CLL), (1) obinutuzumab (GA101) in combination with chlorambucil (G+Clb) and (2) ofatumumab in combination with Clb (O+Clb), have shown improved progression-free survival (PFS) versus Clb alone in two separate trials. However, their relative value has not been formally assessed. The objective of this study was to compare the cost-effectiveness of G+Clb versus O+Clb in previously untreated CLL patients, as well as conduct exploratory analyses versus other comparators. Methods Patient outcomes were simulated using a 3-state Markov model that included PFS, progression, and death. PFS parameters for G+Clb were fitted to the observed G+Clb trial (CLL-11 study) data, and a network meta-analysis incorporating the results of the O+Clb (COMPLEMENT 1 study) was used to estimate the relative treatment effect of G+Clb compared to O+Clb (progression HR = 0.34). Patient populations in these two trials were similar. Drug utilization, dosing and adverse events were incorporated based on trial data, and costs were based on Medicare reimbursements and drug wholesale acquisition costs. One-way and probabilistic sensitivity analyses were conducted to assess the impact of data uncertainty on the results. In an exploratory scenario analyses, we used similar methodology to estimate the cost-effectiveness of G+Clb versus rituximab plus bendamustine (R+B, progression HR = 0.41). A meta-regression on age was used to adjust for the age difference among the patient populations and indirectly taking into account different levels of comorbidities. Results Treatment with G+Clb led to an increase of 0.83 life years and 0.79 quality-adjusted life years (QALYs) relative to O+Clb. The total cost of O+Clb was higher by $3600 per patient relative to G+Clb. Higher G+Clb drug, administration, and adverse event costs were largely offset by lower progression costs compared to O+Clb. The incremental cost per QALY gained with G+Clb vs. O+Clb was $4,500. Based on probabilistic sensitivity analyses, there was a 99% probability that G+Clb was cost-effective compared to O+Clb at a societal willingness-to-pay threshold of $100,000 per QALY saved. Table.OutcomeG+ClbO+ClbDifferenceAverage life years5.744.910.83Average QALYs3.953.160.79Total drug cost$37,192$34,260$2,932Drug administration$1,977$991$985Supportive care$141$73$68Adverse events$9,542$2,660$6,882Cost of progression$46,861$54,147$(7,286)Average total cost$95,713 $92,132 $3,581 In the exploratory scenario analysis, G+Clb was $37,700 less expensive than R+B, and led to an increase of 0.67 QALY. Conclusions Our analysis suggests treatment with G+Clb compared to O+Clb is highly cost-effective based on indirect treatment comparison data. These results are driven by the improved PFS of G+Clb vs. O+Clb, as well as lower disease progression cost. Future direct comparisons of G+Clb versus other treatment options will further clarify the cost-effectiveness of G+Clb, and inform coverage and reimbursement policy decisions. Disclosures Reyes: Genentech: Employment, Equity Ownership. Off Label Use: Rituximab + Bendamustine in CLL. Gazauskas:Genentech: Consultancy. Becker:Roche: Employment. Moreno:Roche: Employment. Veenstra:Roche: Consultancy.


2021 ◽  
Vol 12 (4) ◽  
pp. 236
Author(s):  
Dominik Huber ◽  
Quentin De Clerck ◽  
Cedric De Cauwer ◽  
Nikolaos Sapountzoglou ◽  
Thierry Coosemans ◽  
...  

Electric vehicles (EV) are foreseen as one major technology toward decarbonizing the mobility sector. At the same time, Vehicle to Grid (V2G) technology opens a new market for EV owners. This article identifies the impacts of providing V2G services on the Total Cost of Ownership (TCO) of EVs. Thus, we studied EVs in private, semi-public and public charging cases, considering two different V2G revenue streams. The included V2G services were: (i) local load balancing to balance the peaks and valleys of the electricity demands of buildings and (ii) an imbalance service to enhance grid stability. In this paper, the impact of these two V2G services is quantified and considered in the TCO calculations. To the authors’ knowledge, no comparable study incorporating the same V2G services exists in the literature. The TCO is calculated with real-life data for four different EVs currently available in the market. As a result, the V2G TCO ranges from €33.167 to €61.436 over an average of nine years for the Flanders region (Belgium).


2016 ◽  
pp. 128-136
Author(s):  
Hoang Lan Nguyen ◽  
Thi Tinh Nguyen

Background: In Vietnam, expanded program on immunization (EPI) has vaccinated freely 8 vaccines to children under one year old to protect from tuberculosis, diphtheria, pertussis, tetanus, hepatitis B, polio, measles and pneumonia/ meningitis caused by Hib. The study aims to 1) identify total cost and cost items of EPI at basis health level of Thua Thien Hue province within the first 6 months of the year 2014 and 2) estimate average cost of vaccine delivery per dose and cost per fully vaccinated child (FVC). Materials and method: This is a descriptive cross sectional study. Costs were analyzed on the basis of perspective of health service providers. A direct allocation method was used to estimate average cost of vaccine delivery per dose and cost per FVC. Data of the program within the first 6 months of the year 2014 was collected in provincial preventive medicine center, 3 district health centers and 9 CHCs in TT Hue province to estimate cost. The price of capital assets was adjusted by inflation with time and was annualized using a discount rate of 3%. One-way sensitivity analyses investigated the impact of cost items and wastage ratio on cost of vaccine delivery. Results: The total cost of EPI within 6 months in 9 CHCs was 452.947.417 VND (US$ 21.532) in which vaccine price shared the largest component cost (41.3%). The average cost per FVC was 456.059VND (US$ 21.68) that is higher than of US$ 15 per FVC only for 6 vaccines as recommendation of WHO. The cost was sensitive to wastage ratio of vaccines. Conclusion: The cost of US$ 21.68 per FVC preventing from 8 dangerous infected diseases found in this study is higher than that of threshold of WHO per FVC only for 6 vaccines of EPI in some developing countries. Key words: Expanded program on immunization, vaccine, cost items, basis health level


2014 ◽  
Vol 31 (4) ◽  
pp. 395-418 ◽  
Author(s):  
Mohamed Khaled Omar ◽  
Sharmeeni Murgan

Purpose – The purpose of this study is to present a report on the development of an improved mathematical model for quantifying the cost of quality. In addition, a simulation model is developed using real-life industrial data; the model is used to investigate the impact of certain quality control level plans on cost of quality. Design/methodology/approach – The cost of the quality model was developed based on the reported literature and suggestion from the company quality control manager. An extensive discussion was conducted with the quality control supervisors in the company to develop some quality control plans to investigate their impact on cost of quality. A simulation model that represents a specific section of the process at the company was used to carry out the investigation. The results were analysed and compared with some important findings reported in the literature that describe the characteristics of costs of quality. Findings – The simulation work provides valuable insights into the behavior of the different components that constitute the total cost of quality. The results show that reduction of failure costs can be achieved at low or no-subsequent increase in the non-conformance expenditure. In addition, it seems that the traditional accounting system approach may no longer be adequate since it depends mainly on direct labour costs. The results indicate that the direct labour cost is only contributing by about 3 percent of the total cost of quality. Research limitations/implications – This paper focuses on the development of a comprehensive model for quantifying the cost of quality in a semiconductor company. Future research is needed to expand the model for more complex process configuration. In addition, the developed model could be extended to deal with variant defect rates. Originality/value – This study presents an advanced theoretical model for cost quality that enhanced models of quality presented in the literature. Using the developed cost of the quality model, a comprehensive simulation was carried out to investigate the impact of some quality plans on cost of quality. The study clearly indicates important evidence to justify the implementation of cost of quality models in real-life industry.


2010 ◽  
Vol 6 (3) ◽  
pp. 33
Author(s):  
Robert J Petrella ◽  

It is widely recognised that hypertension is a major risk factor for the development of future cardiovascular (CV) events, which in turn are a major cause of morbidity and mortality. Blood pressure (BP) control with antihypertensive drugs has been shown to reduce the risk of CV events. Angiotensin-II receptor blockers (ARBs) are one such class of antihypertensive drugs and randomised controlled trials (RCTs) have shown ARB-based therapies to have effective BP-lowering properties. However, data obtained under these tightly controlled settings do not necessarily reflect actual experience in clinical practice. Real-life databases may offer alternative information that reflects an uncontrolled real-world setting and complements and expands on the findings of clinical trials. Recent analyses of practice-based real-life databases have shown ARB-based therapies to be associated with better persistence and adherence rates and with superior BP control than non-ARB-based therapies. Analyses of real-life databases also suggest that ARB-based therapies may be associated with a lower risk of CV events than other antihypertensive-drug-based therapies.


2019 ◽  
Vol 6 (1) ◽  
pp. 48-50
Author(s):  
Ikram Uddin

This study will explain the impact of China-Pak Economic Corridor (CPEC) on logistic system of China and Pakistan. This project is estimated investment of US $90 billion, CPEC project is consists of various sub-projects including energy, road, railway and fiber optic cable but major portion will be spent on energy. This project will start from Kashgar port of china to Gwadar port of Pakistan. Transportation is sub-function of logistic that consists of 44% total cost of logistic system and 20% total cost of production of manufacturing and mainly shipping cost and transit/delivery time are critical for logistic system. According to OEC (The Observing Economic Complexity) currently, china is importing crude oil which 13.4% from Persian Gulf. CPEC will china for lead time that will be reduced from 45 days to 10 days and distance from 2500km to 1300km. This new route will help to china for less transit/deliver time and shipping cost in terms of logistic of china. Pakistan’s transportation will also improve through road, railway and fiber optic cabal projects from Karachi-Peshawar it will have speed 160km per hour and with help of pipeline between Gwadar to Nawabshah gas will be transported from Iran. According to (www.cpec.inf.com) Pakistan logistic industry will grow by US $30.77 billion in the end of 2020.


2019 ◽  
Vol 24 (6) ◽  
pp. 722-727
Author(s):  
Aladine A. Elsamadicy ◽  
Andrew B. Koo ◽  
Megan Lee ◽  
Adam J. Kundishora ◽  
Christopher S. Hong ◽  
...  

OBJECTIVEIn the past decade, a gradual transition of health policy to value-based healthcare has brought increased attention to measuring the quality of care delivered. In spine surgery, adolescents with scoliosis are a population particularly at risk for depression, anxious feelings, and impaired quality of life related to back pain and cosmetic appearance of the deformity. With the rising prevalence of mental health ailments, it is necessary to evaluate the impact of concurrent affective disorders on patient care after spinal surgery in adolescents. The aim of this study was to investigate the impact that affective disorders have on perioperative complication rates, length of stay (LOS), and total costs in adolescents undergoing elective posterior spinal fusion (PSF) (≥ 4 levels) for idiopathic scoliosis.METHODSA retrospective study of the Kids’ Inpatient Database for the year 2012 was performed. Adolescent patients (age range 10–17 years old) with AIS undergoing elective PSF (≥ 4 levels) were selected using the International Classification of Diseases, Ninth Revision, Clinical Modification coding system. Patients were categorized into 2 groups at discharge: affective disorder or no affective disorder. Patient demographics, comorbidities, complications, LOS, discharge disposition, and total cost were assessed. The primary outcomes were perioperative complication rates, LOS, total cost, and discharge dispositions.RESULTSThere were 3759 adolescents included in this study, of whom 164 (4.4%) were identified with an affective disorder (no affective disorder: n = 3595). Adolescents with affective disorders were significantly older than adolescents with no affective disorders (affective disorder: 14.4 ± 1.9 years vs no affective disorder: 13.9 ± 1.8 years, p = 0.001), and had significantly different proportions of race (p = 0.005). Aside from hospital region (p = 0.016), no other patient- or hospital-level factors differed between the cohorts. Patient comorbidities did not differ significantly between cohorts. The number of vertebral levels involved was similar between the cohorts, with the majority of patients having 9 or more levels involved (affective disorder: 76.8% vs no affective disorder: 79.5%, p = 0.403). Postoperative complications were similar between the cohorts, with no significant difference in the proportion of patients experiencing a postoperative complication (p = 0.079) or number of complications (p = 0.124). The mean length of stay and mean total cost were similar between the cohorts. Moreover, the routine and nonroutine discharge dispositions were also similar between the cohorts, with the majority of patients having routine discharges (affective disorder: 93.9% vs no affective disorder: 94.9%, p = 0.591).CONCLUSIONSThis study suggests that affective disorders may not have a significant impact on surgical outcomes in adolescent patients undergoing surgery for scoliosis in comparison with adults. Further studies are necessary to elucidate how affective disorders affect adolescent patients with idiopathic scoliosis, which may improve provider approach in managing these patients perioperatively and at follow-up in hopes to better the overall patient satisfaction and quality of care delivered.


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