International Journal of Industrial Engineering & Production Research

---

 

Capacity Reservation,   Option Contract,   Supplier Selection

A key issue for manufacturing firms is planning for outsourced components. In this research, we have considered a manufacturer in a Make-to-Order production environment who has to outsource a special component from a set of suppliers. One selling season is considered and the manufacturer faces uncertain demand during the selling season. A good strategy for the manufacturer to balance both holding and lost sale costs is to initiate capacity reservation contracts with his suppliers. Thus, unlike the previous researches we have presented a mathematical model based on option mechanism that will help the manufacturer to select appropriate suppliers and order allocation, simultaneously. The considered option mechanism has a two part contract fee structure (option price and exercise price) and it is at the foundation of practical contracts used by different industries. A numerical example is used to illustrate the model and to investigate how option mechanism improves manufacturer's expected profit in comparison with the situation without applying the option mechanism .

---

Network location models comprise one of the main categories of location models. These models have various applications in regional and urban planning as well as in transportation, distribution, and energy management. In a network location problem, nodes represent demand points and candidate locations to locate the facilities. If the links network is unchangeably determined, the problem will be an FLP (Facility Location Problem). However, if links can be added to the network at a reasonable cost, the problem will then be a combination of facility location and NDP (Network Design Problem) hence, called FLNDP (Facility Location Network Design Problem), a more general variant of FLP. In previous studies of this problem, capacity of facilities was considered to be a constraint while capacity of links was not considered at all. The proposed MIP model considers capacity of facilities and links as decision variables. This approach increases the utilization of facilities and links, and prevents the construction of links and location of facilities with low utilization. Furthermore, facility location cost (link construction cost) in the proposed model is supposed to be a function of the associated facility (link) capacity. Computational experiments as well as sensitivity analyses performed indicate the efficiency of the model.

---

The existing works considering the flow-based discount factor in the hub and spoke problems, assume that increasing the amount of flow passing through each edge of network continuously decreases the unit flow transportation cost. Although a higher volume of flow allows for using wider links and consequently cheaper transportation, but the unit of flow enjoys more discounts, quite like replacing the current link by a cheaper link type (i.e., increasing the volume of flow without changing the link type would not affects the unit flow transportation cost). Here, we take a new approach, introducing multi-level capacities to design hub and spoke networks, while alternative links with known capacities, installation costs and discount factors are available to be installed on each network edge. The flow transportation cost and link installation cost are calculated according to the type of links installed on the network edges thus, not only the correct optimum hub location and spoke allocation is determined, but also the appropriate link type to be installed on the network edges are specified. The capacitated multiple allocation p-hub median problem (CMApHMP) using the multi-level capacity approach is then formulated as a mixed-integer linear program (MILP). We also present a new MILP for the hub location problem using a similar approach in order to restrict the amount of flow transmitting through the hubs. Defining diseconomies of scale for each hub type, the model is to present congestion at the hubs and balance the transmitting flow between the hubs. Two new formulations are presented for both the p-hub median and the hub location problems which requiring a flow between two non-hub nodes to be transferred directly, when a direct link between the nodes is available. These models are useful for the general cost structure where the costs are not required to satisfy the triangular inequality. Direct links between non-hub nodes are allowed in all the proposed formulations.

---

In most of the multi–criteria decision–analysis (MCDA) problems in which the Choquet integral is used as aggregation function, the coefficients of Choquet integral (capacity) are not known in advance. Actually, they could be calculated by capacity definition methods. In these methods, the preference information of decision maker (DM) is used to constitute a possible solution space. The methods which are based on optimizing an objective function most often suffer from three drawbacks. Firstly, the selection of the ultimate solution from solution set is arbitrarily done. Secondly, the solution may provide more information than whatever proposed by DM. Thirdly, DM may not fully interpret the results. Robust capacity definition methods are proposed to overcome these kinds of drawbacks, on the other hand these methods do not consider evenness (uniformity) which is a major property of capacity. Since in capacity definition methods, the preference information on only a subset of alternatives called reference alternatives, is used, defining the capacity as uniform as possible could improve its capability in evaluating non–reference alternatives. This paper proposes an algorithm to define a capacity that is based only on the preference information of DM and consequently is representative. Furthermore, it improves evenness of capacity and consequently its reliability in evaluating non–reference alternatives. The algorithm is used to evaluate power plant projects. Power plant projects are of the most important national projects in Iran and a major portion of national capital is invested on them, so these projects should be scientifically evaluated in order to figure out their performance. Case–specific criteria are considered in addition to general criteria used in project performance evaluation. The evaluation results obtained from proposed algorithm are compared with those of the most representative utility function method.

---

This paper considers a bi-objective mathematical model for locations of landfills, transfer stations and material recovery facilities (MRFs) in order to serve the entire regions and simultaneously identify the capacities of landfills. This is a mixed-integer programming (MIP) model, whose objectives are to minimize the total cost and pollution simultaneously. To validate the model, a numerical example is solved an augmented ε-constraint method and the associated computational results are presented to show the number of solid waste facilities and location of sites for solid waste facilities.

---

Managing income is a considerable dimension in supply chain management in current economic atmosphere. Real world situation makes it inevitable not to design or redesign supply chain. Redesign will take place as costs increase or new services for customers’ new demands should be provided. Pricing is an important fragment of Supply chain due to two reasons: first, represents revenue based each product and second, based on supply-demand relations enables Supply chain to provide demands by making suitable changes in facilities and their capacities. In this study, Benders decomposition approach used to solve multi-product, multi-echelon and multi-period supply chain network redesign including price-sensitive customers.

---

Development of every society is incumbent upon energy sector’s technological and economic effectiveness. The electricity industry is a growing and needs to have a better performance to effectively cover the demand. The industry requires a balance between cost and efficiency through careful design and planning. In this paper, a two-stage stochastic programming model is presented for the design of electricity supply chain networks. The proposed network consists of power stations, transmission lines, substations, and demand points. While minimizing costs and maximizing effectiveness of the grid, this paper seeks to determine time and location of establishing new facilities as well as capacity planning for facilities. We use chance constraint method to satisfy the uncertain demand with high probability. The proposed model is validated by a case study on Southern Khorasan Province’s power grid network, the computational results show that the reliability rate is a crucial factor which greatly effects costs and demand coverage. 

---

The problems of efficient use of natural resources capacity in conditions of administrative and territorial reform affect the local level in the first place, in particular due to the fact that most communities do not have information about what resources they possess and how to use them properly for the development of Consolidated Territorial Communities (CTCs). The paper provides the calculations of integral index of CTCs’ natural resources capacity, which includes a certain group of sub-indices, namely the budget efficiency of the use of natural resources capacity; concentration of natural resources; provision of population with resources; rent payment. The analysis of the use of natural resources capacity to fill a CTC’s budget is conducted; concentration of natural resources at a CTC’s territory is determined; provision of a CTC’s population with natural resources is calculated; main aspects of rent payment that provides most revenues to local budgets are researched; the reserves of increase of communities’ natural resources capacity are revealed. The fact that community residents’ participation in control of the use of natural resources at their territory is essential for the community’s development is established.

---

Innovative capacity as a potential ability of an enterprise to innovative development is manifested in the process of formation and realization of an innovative product, which can be embodied in various forms. In the article innovation capacity is considered as a complex concept that covers the innovative output of the enterprise and the reserve for providing innovative capacity, which can make the difference between the innovative capacity and the current state of the innovative output of the enterprise.
In order to improve the level of management processes in the enterprise, the article improves the method of evaluation the innovative capacity, which is based on the use of a three-dimensional space model of the dependence of the innovative capacity on the level of loading vectors of technique of the enterprise (X-axis), applied innovative technologies (Y-axis) and resources (Z-axis) using AHP-model (analytical-hierarchical process model) and certain functional dependencies that indicate the state of innovative capacity of the enterprise and allow to identify the reserve for providing innovative capacity.
The system of indicators designed to measure the enterprise's innovation capacity is developed on the basis of the AHP-model (analytical-hierarchical process model), which contains two levels: 1) partial indicators designed to assess the level of loading of vectors of the three-dimensional space model of the enterprise's innovation capacity; 2) generalized indicators by which the level of innovation capacity is determined. The article uses the relative weight of indicators, which is calculated by forming a matrix of judgments and evaluating the components of the vector of its priorities.

---