Integrated Supply Chain Design and Management for Remnant Inventory Systems

University Of Pittsburgh, Pittsburgh PA

Investigators

Abstract

At the heart of the grant is a cutting stock problem - this is a classical problem familiar to most researchers in operations research and has applications in a number of continuous production applications including metals such as steel or aluminum, paper, textiles, fiber-optic and electrical cable, and glass, to name a few. However, the version around which the proposed research is built is fundamentally different. The grant address the case where a company has geographically distributed distribution points that it can stock with standard sizes from its plants, and the customer demand for smaller sizes comes from other geographically distributed points on a continuing basis. Second, this demand is stochastic in nature. Third, it addresses a sustainable manufacturing environment where the trim is not considered waste, but rather gets recycled and has an inherent value associated with it. Fourth, the problem is not a static one where a one-time decision has to be made. Rather, decisions need to be made on an ongoing basis, and decisions made at one point in time have a significant impact on decisions at later points in time. The overall objective is to find long-run rates of replenishment for the standard sizes as well as long-run policies for cutting these into smaller pieces so as to satisfy customer demand. The grant will extend this basic model to consider supply chain design problems and the analogous case for two-dimensional products. Supply chain problems are critical for most industries. While there has been much research into optimizing supply chains, most research considers only a small part of the supply chain. This grant is unique in that it provides optimal policies for the design and operations of a supply chain under uncertainty. Since it addresses one-dimensional and two-dimensional products it will have applications to many industrial problems.