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Inventory Management Problem for Cold Items with Environmental and Financial Considerations

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Date Issued:
2014
Abstract/Description:
The overarching theme of this dissertation is analytically analyzing the cold supply chain from a financial and environmental perspective. Specifically, we develop inventory policy models in the cold supply chain that consider holding and transportation unit capacities. The models provide insights for the decision maker on the tradeoff between setting order quantities based on the cost or the emission function.In Chapter 2, we review two major bodies of literature: 1) supply chain design, and 2) sustainability in supply chain design. We benefit from this literature review to map the current body of research on traditional supply chain for further comparison with the cold supply chain. Sustainability in supply chain network design is often measured by the carbon footprint; other sustainability metrics such as water footprint and sustainable energy are not included. Literature on supply chain design can be further broken down into its three major components: 1) facility location/allocation, 2) inventory management, and 3) facility location/allocation combined with inventory management. In Chapter 3, we study and present an overview of the cold chain. In accordance to the three levels of supply chain management decision making, the study is divided into the following three sections: (1) strategic level, (2) tactical level, and (3) operational level. Specifically, we capture how these decisions will impact the three main components of sustainability: economic, environmental, and social components. In addition, we explain how these components are different in the cold chain, in comparison to the traditional supply chain, and why such unique differences are worth studying. The intent of this chapter is to provide an overview of cold chains and to identify open areas for research. Examples from industrial cases, in addition to data and information from white papers, reports and research articles are provided.In Chapter 4, the cold item inventory problem is formulated as a single-period model that considers both financial and emissions functions. A new formulation for holding and transportation cost and emission is proposed by considering unit capacity for holding and transportation. This model applies to cold items that need to be stored at a certain, non-ambient temperature. Holding cold items in a warehouse is usually done by dividing the warehouse into a set of cold freezer units inside rather than refrigerating the entire warehouse. The advantage of such a design is that individual freezer units can be turned off to save cost and energy, when they are not needed. As a result, there is a fixed (setup) cost for holding a group of items, which results in a step function to represent the fixed cost of turning on the freezer units, in addition to the variable cost of holding items based on the number of units held in inventory. Three main goals of studying this problem are: 1) deriving the mathematical structure and modeling the holding and transportation costs and environmental functions in cold chains, 2) proposing exact solution procedures to solve the math models, and 3) analyzing the tradeoffs involved in making inventory decisions based on minimizing emissions vs. minimizing cost in cold chains.This problem demonstrates the tradeoff between the cost and the emission functions in an important supply chain decision. Also, the analytical models and solution approaches provide the decision maker with analytical tools for making better decisions.In Chapter 5, we expand the developed model from Chapter 4 to include multiple types of products. We consider a group of products that share capacities as a family of products. According to the problem formulation, we have two types of decision variables: (1) determining if a product is a member of a family or not, and (2) how much to order and how frequently to order for products within each family. We propose a solution procedure in accordance with the decision variable types: (1) a procedure for grouping (partitioning) the products into different families, and (2) a procedure to solve the inventory problem for each family. A set of experiments are designed to answer a number of research questions, and brings more understandings of the developed models and solutions algorithms.Finally, the conclusions of this dissertation and suggestions for future research topics are presented in Chapter 6.
Title: Inventory Management Problem for Cold Items with Environmental and Financial Considerations.
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Name(s): Hajiaghabozorgi, Ali, Author
Pazour, Jennifer, Committee Chair
Karwowski, Waldemar, Committee Member
Zheng, Qipeng, Committee Member
Nazzal, Dima, Committee Member
University of Central Florida, Degree Grantor
Type of Resource: text
Date Issued: 2014
Publisher: University of Central Florida
Language(s): English
Abstract/Description: The overarching theme of this dissertation is analytically analyzing the cold supply chain from a financial and environmental perspective. Specifically, we develop inventory policy models in the cold supply chain that consider holding and transportation unit capacities. The models provide insights for the decision maker on the tradeoff between setting order quantities based on the cost or the emission function.In Chapter 2, we review two major bodies of literature: 1) supply chain design, and 2) sustainability in supply chain design. We benefit from this literature review to map the current body of research on traditional supply chain for further comparison with the cold supply chain. Sustainability in supply chain network design is often measured by the carbon footprint; other sustainability metrics such as water footprint and sustainable energy are not included. Literature on supply chain design can be further broken down into its three major components: 1) facility location/allocation, 2) inventory management, and 3) facility location/allocation combined with inventory management. In Chapter 3, we study and present an overview of the cold chain. In accordance to the three levels of supply chain management decision making, the study is divided into the following three sections: (1) strategic level, (2) tactical level, and (3) operational level. Specifically, we capture how these decisions will impact the three main components of sustainability: economic, environmental, and social components. In addition, we explain how these components are different in the cold chain, in comparison to the traditional supply chain, and why such unique differences are worth studying. The intent of this chapter is to provide an overview of cold chains and to identify open areas for research. Examples from industrial cases, in addition to data and information from white papers, reports and research articles are provided.In Chapter 4, the cold item inventory problem is formulated as a single-period model that considers both financial and emissions functions. A new formulation for holding and transportation cost and emission is proposed by considering unit capacity for holding and transportation. This model applies to cold items that need to be stored at a certain, non-ambient temperature. Holding cold items in a warehouse is usually done by dividing the warehouse into a set of cold freezer units inside rather than refrigerating the entire warehouse. The advantage of such a design is that individual freezer units can be turned off to save cost and energy, when they are not needed. As a result, there is a fixed (setup) cost for holding a group of items, which results in a step function to represent the fixed cost of turning on the freezer units, in addition to the variable cost of holding items based on the number of units held in inventory. Three main goals of studying this problem are: 1) deriving the mathematical structure and modeling the holding and transportation costs and environmental functions in cold chains, 2) proposing exact solution procedures to solve the math models, and 3) analyzing the tradeoffs involved in making inventory decisions based on minimizing emissions vs. minimizing cost in cold chains.This problem demonstrates the tradeoff between the cost and the emission functions in an important supply chain decision. Also, the analytical models and solution approaches provide the decision maker with analytical tools for making better decisions.In Chapter 5, we expand the developed model from Chapter 4 to include multiple types of products. We consider a group of products that share capacities as a family of products. According to the problem formulation, we have two types of decision variables: (1) determining if a product is a member of a family or not, and (2) how much to order and how frequently to order for products within each family. We propose a solution procedure in accordance with the decision variable types: (1) a procedure for grouping (partitioning) the products into different families, and (2) a procedure to solve the inventory problem for each family. A set of experiments are designed to answer a number of research questions, and brings more understandings of the developed models and solutions algorithms.Finally, the conclusions of this dissertation and suggestions for future research topics are presented in Chapter 6.
Identifier: CFE0005501 (IID), ucf:50365 (fedora)
Note(s): 2014-05-01
Ph.D.
Engineering and Computer Science, Industrial Engineering and Management Systems
Doctoral
This record was generated from author submitted information.
Subject(s): Cold Chain -- Inventory Management -- Supply Chain -- Environmental -- Emission
Persistent Link to This Record: http://purl.flvc.org/ucf/fd/CFE0005501
Restrictions on Access: public 2014-11-15
Host Institution: UCF

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