Genetic Algorithm and Other Meta-Heuristics

Genetic algorithms have been applied in solving various types of large-scale, NP-hard optimization problems. Many researchers have been investigating its global convergence properties using Schema Theory, Markov Chain, etc. A more realistic approach, however, is to estimate the probability of success in finding the global optimal solution within a prescribed number of generations under some function landscapes. Further investigation reveals that its inherent weaknesses that affect its performance can be remedied, while its efficiency can be significantly enhanced through the design of an adaptive scheme that integrates the crossover, mutation and selection operations. The advance of Information Technology and the extensive corporate globalization create great challenges for the solution of modern supply chain models that become more and more complex and size formidable. Meta-heuristic methods have to be employed to obtain near optimal solutions. Recently, a genetic algorithm has been reported to solve these problems satisfactorily and there are reasons for this.

Supply Chain Globalization and the Complexities of Cost-Minimization Strategies

We review the evolving literature on globalization with three aims in mind. First, we introduce the concept of globalization within the context of supply chain management. Second, with an eye toward information that may be useful for supply chain planners, we detail the motivation for global integration of the supply chain. Our third aim is to address global supply-chain issues that may be at odds with cost-minimizing strategies. Specifically, in this time of political debate regarding trade legislation, these issues involve the consideration of country of origin when sourcing, and the disparate demands of customers when marketing. A country offering inexpensive components may be associated with poor quality. Thus, despite inexpensive inputs, the overall profitability of the supply chain may suffer as perceived quality deteriorates. Similarly, a largely standardized product across multiple markets may present the lowest cost alternative from a production standpoint, but a high degree of standardization may reduce the attractiveness of the product in the eyes of the end consumer, and reduce overall profitability.

Multi-Stage Efficiency Tools for Goal Setting and Monitoring in Supply Chains

This chapter discusses the extension and potential application of some recent theoretical results on efficiency monitoring and throughput rate optimization for serial processes. In particular, we consider the relevance and adaptation of these results for use in monitoring and continuous improvement uses in supply chains or networks, with particular emphasis on the importance to e-business. Linear programming models based on ideas from Data Envelopment Analysis have been developed for maximizing the throughput of serial input-output processes in which one or more outputs of an upstream process become inputs to a successor process. We consider their adaptation to supply chain monitoring. We also propose some additional research needs in this area.

The Effect of Different Payment Terms on Order Variability in a Supply Chain

Literature on supply chain management has acknowledged the effects of forecasting techniques, lot sizing rules, centralising information system, vendor managed inventory, and various biases and noises on order variability or bullwhip effect. We will show in this chapter that order variability from a buyer is also affected by the payment terms offered by the supplier. We develop mathematical models to accommodate different payment terms into the lot sizing techniques. The models are then simulated under uncertain demand situations over a range of parameter values. The results suggest that payment terms have substantial impacts on order variability passed by a supply chain channel onto its upstream channel.

A Co-Ordinated Single-Vendor Multi-Buyer Supply Chain Model

his chapter considers the co-ordination in a single-vendor multi-buyer supply chain by synchronising ordering and production cycles. The synchronisation is achieved by scheduling the actual ordering days of the buyers and co-ordinating it with the vendor’s production cycle whilst allowing the buyers to choose their own lot sizes and order cycle. A mathematical model for our proposed co-ordination is developed and analysed. Our results show that the synchronised cycles policy works better than independent optimisation or restricting buyers to adopt a common order cycle. Some illustrative examples demonstrate that there are circumstances where both the vendor and the buyers gain from such synchronisation without the need for price and quantity discount incentives.

Studies on Interaction and Coordination in Supply Chains with Perishable Products

We review the recent literature on supply chain management of perishable products. Our emphasis is placed on the interaction and coordination between inventory and marketing, financing, distribution, and production. We survey the recent research progress in this area, by discussing the motivations, features and extensions of various models.

Life Cycle Considerations for Supply Chain Strategy

The goal of this chapter is to propose a framework for the dynamics of supply chains from a life cycles point of view. It is inevitable for supply chains to be affected by the life cycles of the product. There are three important interrelated life cycles that have effects on the dynamics of supply chains and are associated with the product. These are: (i) the innovation (Abernathy & Clark, 1983), (ii) the market (Kotler, 1999), and (iii) the location (Vernon, 1966). The first life cycle related to the innovation illustrates how the product and production process progress. It gives us a hint to consider the feasibility of the location dependent on the degree of innovativeness of the product. The second one related to the market clarifies the marketing objectives in each stage. It suggests the reasonable location strategy. The last one related to the location proposes the relation between the product and the reasonable location of the manufacturing facilities. It is operational because it considers the timing and the reason to shift the manufacturing facilities. In this chapter, we discuss the mission and structure of the supply chain in the different stages of these life cycles. We illustrate the proposed framework using the case of the VCR.

Re-Engineering of Logistics Activities for Electronic Commerce

In order to achieve a successful implementation of electronic commerce (EC), it is necessary to “re-engineer” the logistics activities of the enterprise. This chapter first presents and analyses the features of EC, i.e., the typical content of Web sites and technological and operational requirements, for the implementation of each of the four stages of EC (Brochureware, e-commerce, e-business, and e-enterprise). Then the concepts, techniques, and tools that may contribute to the successful implementation of EC are surveyed. Finally, a self-diagnosis tool is presented to initiate the re-engineering process. The self-diagnosis tool details the company’s profile in view of an EC implementation and identifies the operational activities that need to be reviewed, upgraded, integrated or outsourced.

Understanding and Managing the Intrinsic Dynamics of Supply Chains

Both academically and practically, one of the most interesting aspects of supply chains is their intrinsic dynamic behavior. Dynamic interactions can cause unexpected and undesirable results. There are both external and internal reasons for this. Externally, severely competitive environments, consumer behavior and technological innovations are major concerns for supply-chain management. These affect both the structure and behavior of the supply chain and force it to be more flexible and agile. Internally, the supply chain is a multi-echelon system composed of a scratched-together and shifting set of players whose preferences and intentions often differ. This may create and amplify the information distortions, lags, and tricks of business within the supply chain. The combined effects of these external and internal factors make Supply Chain Dynamics (SCD) active and complex. In this chapter, we discuss the influences, mechanisms, and effects of SCD.

Optimal Feedback Production for a Supply Chain

In this chapter, we modeled the dynamics of a supply chain considered by several authors. An infinite-horizon, time-delayed, optimal control problem was thus obtained. By approximating the time interval [0, ¥] by [0, Tf ], we obtained an approximated problem (P(Tf )) which could be easily solved by the control parameterization method. Moreover, we could show that the objective function of the approximated problem converged to that of the original problem as Tf ® ¥. Several examples have been solved to illustrate the efficiency of our method. In these examples, some important results relating the production rate to demand rate have been developed.