Intra-Organizational and inter-organizational resource allocation in two-stage network systems

There are organizational systems, such as bank branches and two-stage supply chains, which are composed of multiple parallel two-stage structures. Resource allocation in these systems is to maximize the benefit of the overall organization from a global viewpoint. In this study, we consider two types of systems at an organizational level: a centralized organizational system treating the whole two-stage production process as a basic unit, and a decentralized organizational system including two sub-organizations (groups) treating one of the two-stage production processes as a basic unit. We propose intra-organizational and inter-organizational resource allocation plans for two different organizational systems, respectively. Specially, two modes of free intermediate resource allocation (Free IRA) and fixed intermediate resource allocation (Fixed IRA) are discussed for the decentralized organizational system. The proposed allocation plans are based on two-stage data envelopment analysis models with bi-level formulations, in which the upper-level model is to maximize the entire organizational effectiveness (total outputs minus total inputs) by determining the optimized input resources and output targets while the lower-level model is concerned with efficiency constraints of all decision-making units simultaneously. The developed methods are illustrated by an application to a real-world problem with 17 city bank branches.     

一种新的双目标DEA模型

在经济系统的分析研究中,由于资源的有限性,我们总想以最少的投入获得最多的产出。本文给出了决策单元输入总量最小且输出总量最大时的一种双准则DEA模型,并用线性加权和法对其进行了求解,该模型能使所有决策单元同时达到相对效率最优。     

Budgets for integrating decentralized investment and production planning

Planning for an economic enterprise can be dichotomized into short-run production planning and longer-run investment planning. Usually these problems are treated as if they were separate, if not independent. This paper briefly reviews the separate approaches to optimal production decision making and investment planning, ‘fusing’ these models in order to consider the two issues simultaneously. The resulting ‘fused’ model is used to illustrate several difficulties which result from an intuitive synthesis of the independent solutions of the production problem and the investment problem. An integrated model is presented representing a centralized simultaneous solution for decision variables from the two functional fields. The paper compares and contrasts the synthesis of separate functional models to the decomposition of a simultaneous model of those functional areas. A result of this comparison is a theoretical justification for operating budgets and revenue targets as organizational mechanisms for achieving coordinated plans among decentralized planning units. Further, the set of conditions are identified under which the two approaches to simultaneous decision making are equivalent.     

区间DEA模型求解算法及其在项目投资效率评价中的应用

当决策单元的变量取值区间范围较大时,经典区间DEA求解算法求得的相对效率区间长度也可能较大,对决策单元有效性的解释力低,很难直观反映相对效率的大小。将决策单元的变量区间划分为若干个子区间,分别计算决策单元在各子区间上的DEA效率,进而求得综合效率区间,作为评价决策单元有效性的基准。综合效率区间的区间长度比经典算法的求解结果小,将新算法应用于投资项目的效率评价,便于对投资项目的效率大小进行比较,进而为项目投资决策提供科学依据。     

A slacks-based inefficiency measure for a two-stage system with bad outputs

We model the performance of DMUs (decision-making units) using a two-stage network model. In the first stage of production DMUs use inputs to produce an intermediate output that becomes an input to a second stage where final outputs are produced. Previous black box DEA models allowed for non-radial scaling of outputs and inputs and accounted for slacks in the constraints that define the technology. We extend these models and build a performance measure that accounts for a network structure of production. We use our method to estimate the performance of Japanese banks, which use labor, physical capital, and financial equity capital in a first stage to produce an intermediate output of deposits. In the second stage, those deposits become an input in the production of loans and securities investments. The network estimates reveal greater bank inefficiency than do the estimates that treat the bank production process as a black box with all production taking place in a single stage.     

The multilevel approach to organizational issues of the firm—A critical review

This paper critically reviews the progress and state of multilevel decomposition models for the firm and its management. The presentation introduces and summarizes the fundamental ideas and also gives concise statements concerning advanced developments. The pricing approach, and the budgeting approaches are the two approaches considered. For managerial planning, initial starting solutions, iteration processes, and stopping rules are important algorithmic and organizational considerations. Further, in decentralized organizations, the motivations for cheating in planning, incentives for innovation, and reactions to uncertainty require attention. For these approaches one concludes that further theoretical work designed especially for managerial relevance needs to be developed. Despite these deficiencies, the practitioner need not wait for all the answers as the currently employed methods of pricing and budgeting for planning suffer the same deficiencies, and yet lack the power to choose better plans as the multilevel decomposition approach offers.     

考虑故障停机的生产控制与维修计划联合决策模型

通过生产控制与维修计划协同决策,降低生产成本。首先描述生产过程,分析各项费用。其次,建立了考虑生产过程失控、故障率和故障停时间的生产过程控制、生产计划优化和维修管理联合优化决策的模型。通过模型求解,联合制定出生产过程检查策略、生产计划（经济生产批量、生产批次）以及维修计划（PM间隔期）,实现单位时间内总费用最低的目标。再次,案例研究,分析生产过程失控、故障率和故障停机时间对于经济生产批量、生产过程检查策略和生产系统维修计划的影响。该模型从理论上解决了生产过程控制、生产计划优化和维修管理联合优化决策难题,对于指导企业制定生产计划和生产系统的检修计划,进而提高产品质量、降低生产成本、确保准时交货都具有指导意义和实用价值。     

Tactical production and distribution planning with dependency issues on the production process

Tactical production-distribution planning models have attracted a great deal of attention in the past decades. In these models, production and distribution decisions are considered simultaneously such that the combined plans are more advantageous than the plans resolved in a hierarchical planning process. We consider a two-stage production process, where in the first stage raw materials are transformed into continuous resources that feed the discrete production of end products in the second stage. Moreover, the setup times and costs of resources depend on the sequence in which they are processed in the first stage. The minimum scheduling unit is the product family which consists of products sharing common resources and manufacturing processes. Based on different mathematical modelling approaches to the production in the first stage, we develop a sequence-oriented formulation and a product-oriented formulation, and propose decomposition-based heuristics to solve this problem efficiently. By considering these dependencies arising in practical production processes, our model can be applied to various industrial cases, such as the beverage industry or the steel industry. Computation tests on instances from an industrial application are provided at the end of the paper.     

Data envelopment analysis: Prior to choosing a model

In this paper, we address several issues related to the use of data envelopment analysis (DEA). These issues include model orientation, input and output selection/definition, the use of mixed and raw data, and the number of inputs and outputs to use versus the number of decision making units (DMUs). We believe that within the DEA community, researchers, practitioners, and reviewers may have concerns and, in many cases, incorrect views about these issues. Some of the concerns stem from what is perceived as being the purpose of the DEA exercise. While the DEA frontier can rightly be viewed as a production frontier, it must be remembered that ultimately DEA is a method for performance evaluation and benchmarking against best-practice. DEA can be viewed as a tool for multiple-criteria evaluation problems where DMUs are alternatives and each DMU is represented by its performance in multiple criteria which are coined/classified as DEA inputs and outputs. The purpose of this paper is to offer some clarification and direction on these matters.     

基于最近距离投影的DEA两阶段效率评价方法研究

数据包络分析是进行效率评价最重要的方法之一。传统的数据包络分析理论主要寻找有效前沿面上的最远距离投影，在极大化无效性指数的同时也面临着效率改进的巨大难度和高额成本。对于具有两阶段内部生产结构的决策单元，本文从考虑最小改进难度的视角出发，提出了最近距离投影的两阶段效率评价方法。该方法首先得到所有强有效决策单元的线性组合，且这些组合均占优于被评价的两阶段决策单元。然后建立了两阶段范围调整效率评价模型，在确定具有最近投影距离的占优组合的同时，得到了两阶段评价效率。最后，本文运用我国32家上市银行的年度数据对所提出方法进行了应用验证。     

NERJIT: Using Net Requirement Data in Kanban‐Controlled Jumbled‐Flow Shops

The bold lines that have separated the application of specific production planning and control techniques to specific production systems are being blurred by continuous advances in production technologies and innovative operational procedures. Oral communication among dispatchers and production units has given way to electronic communication between production planners and these units by continuous progress in information technologies. Current production literature alludes to the idea that, collectively, these advances have paved the way for application of Just‐In‐Time (JIT) production concepts, which were originally developed for mass production systems, in intermittent production systems. But this literature does not actually consider the possibility. This article presents a modification to JIT procedures to make them more suitable for jumbled‐flow shops. This article suggests providing real‐time information about net‐requirements for each product to each work center operator for setting production priorities at each work center. Simulation experiments conducted for this study show that using Net‐Requirements in JIT (NERJIT) reduces customer wait time by 45–60% while reducing inventory slightly. The analysis of work centers’ input and output stock‐point inventories shows that using the information about net‐requirements results in production of items that are in current demand. NERJIT results in smaller input stock‐point inventory and availability of products with higher priority in the output stock‐points of work centers.     

Non-oriented slack-based decompositions of profit change with an application to Taiwanese banking

A change in profit can originate from the output side and the input side. In the spirit of work by Tone [1] and follows Grifell-Tatjé and Lovell's [2], we propose a non-oriented slacks-based measure (SBM) model to decompose the change in the operating profit into various meaningful components: quantity effect and a price effect. The quantity effect can be decomposed into a productivity effect and an activity effect. The productivity effect is further decomposed into a technical effect and an operating efficiency effect. Both of them include an output side, which will result in a change in revenue and an input side which will result in a change in cost. The activity effect can be decomposed into a product mix effect, a resource mix effect and a scale effect. We illustrate our decompositions to the Taiwanese banking sector during the period 1994-2002 using the average of the base and current prices to evaluate these contributions. We find ignoring input side effects on the decomposition of profit changes would cause misleading results in managerial issues.     

Engineer-to-order (ETO) production planning and control: an empirical framework for machinery-building companies

This paper illustrates the results of an empirical study involving 21 engineer-to-order (ETO) companies, operating in the machinery-building industry. The study investigates the needs and requirements of such companies in terms of software support for governing the businesses, with particular emphasis on production planning and control (PPC) processes. An empirical analysis investigated two main aspects: (i) the set of business activities performed by the companies in the analysed industry and (ii) the relevant, high-level software functionalities required for the execution of such activities. As an answer to the observed compelling need for reviewing the general approaches to PPC in machinery-building companies, we develop an empirical, high-level production planning and scheduling reference framework, encompassing all the activities involved in the order fulfilment process.     

Column generation with free replicability in DEA

The evaluation of efficiency scores in data envelopment analysis is based on the construction of artificial decision making units subject to some assumptions, usually requiring convexity of the production possibility set. This demands divisibility in input and output, which is not always possible. The so-called free replicability model, proposed by Henry Tulkens, permits input and output to enter in only discrete amounts. The model is of a mixed integer programming type, for which the number of variables, here corresponding to the decision making units, may be critical in order to reach an optimal solution.     

具有双重角色和非期望要素的供应商评价两阶段DEA模型

在基于DEA方法的供应商评价过程中,会出现供应商同时具有双重角色要素和非期望输出要素的情形。文章提出了一个处理双重角色要素的新思路,认为DEA模型中双重角色要素同时扮演了输入和输出两个角色,所有双重角色要素本质上就是网络DEA模型中的中间变量,并同时认为包含双重角色要素的生产系统一定能分解成为多个子系统,其中的双重角色要素既是一个子系统的输入,同时又是另一个子系统的输出。为测度供应商的效率,基于已有关系型两阶段DEA模型,将供应商的生产运营视为两阶段过程,其双重角色要素视为两阶段过程的中间变量,并通过将所有输出以加权和的形式表达,但对非期望输出用负的权重的方式,提出了一个具有双重角色和非期望输出要素的供应商评价两阶段DEA模型,最后用一个实例验证了方法的可行。     

Technische Ineffizienz als Ergebnis rationalen Entscheidungsverhaltens

In this paper, we discuss several approaches that explain why technical inefficiencies may result from rational decision-making. The reasons behind the rational inefficiencies discussed are (1) individuals using their discretionary space in order to maximise their own instead of their organisation's objective function, (2) input slacks having value in the sense that they can be used to produce outputs that are not yet accounted for by the enterprise's production function, (3) decision makers maximising a profit function that is – due to specific market conditions – non-monotonic with respect to the quantities of inputs and outputs involved in the production process, and (4) a manager choosing a technically inefficient combination of working pace and working time in a service production process in order to maximise his individual utility function. All these approaches demonstrate that, contrary to the assumption in traditional production theory, technical efficiency is not a prerequisite for optimality. Hence, thoughtlessly applying the traditional quantity-based efficiency criterion for the pre-selection of production alternatives may lead to suboptimal results.     

Eco-efficiency analysis of paper mills along the Huai River: An extended DEA approach

The objective of this paper is to estimate the ecological efficiency of paper mills along the Huai River in China. The main characteristic of the ecological efficiency evaluation problem is that an undesirable output of biochemical oxygen demand (BOD) and a non-discretionary input (BOD emission quota) should be considered simultaneously. By analyzing the impacts of the non-discretionary input on decision-making units’ (DMUs) desirable and undesirable outputs, a non-radial output-oriented DEA model is proposed. In the proposed model, we describe a new approach of defining reference set that requires reference units operate in a similar environment on average. We employ the model to provide efficient inputs/outputs targets for DMU managers to improve DMUs’ efficiencies. Based on the developed model, impacts of the non-discretionary input on DMUs’ returns are also analyzed. We illustrate the proposed model, using real data, for 32 paper mills along the Huai River in China.     

A review of capacity planning techniques within standard software packages

This paper gives a review of capacity planning techniques from which today's standard software packages for production control make their choice. The following techniques are discussed in the paper: four variants of the rough cut capacity check, capacity requirements planning with infinite and finite loading, input/output planning without and with individual work orders, and a number of sequencing techniques. An important issue throughout the paper is the concept of robustness and nervousness of planning techniques, Aspects of interaction between techniques and human planners arc given. The human planner is still an important factor in capacity planning.     

Hierarchical control of semi-automated production systems

An integrated control model of a hierarchical production system is presented where the output can be measured only at preset control points as it is impossible or costly to measure it continuously. Three levels are considered—company, section, production unit—each level faces stochastic optimization problems. Each unit produces a given target amount by a given due date (common to all units) and has several possible speeds, which are subject to disturbances. On the unit level, at each control point, decision-making centres on determining both the next control point and the speed to proceed with up to that point. The section level is faced with problems of either reallocating resources among the section's units or reassigning the remaining target amounts among the units so that the faster one will help the slower one. The company level is faced with similar problems, i.e. reallocating resources or reassigning target amounts among the sections. Two different cases are considered: (1) cost parameters are not taken into account, i.e. there are two conflicting objectives, namely to maximize the probability of completing the production on the due date and to minimize the number of control points, but the first objective is dominant; (2) the objective is to maximize the expected net profit. Various optimization problems at each level are presented. Examples from steel, construction and mining industries are given.     

Carbon Emissions Abatement (CEA) allocation and compensation schemes based on DEA

As environment constraints on economic growth are strengthening, Carbon Emissions Abatement (CEA) allocation becomes a significant issue that draws academia׳s attention. In the literature, the Data Envelopment Analysis (DEA) technique has been applied to obtain CEA allocation with centralized models. Nevertheless, a centralized allocation plan suffers from an implementation difficulty in persuading decision-making units (DMUs) into an agreement. In this paper, we propose a new two-step method to mitigate this side effect. In the first step, we provide improved DEA-based centralized allocation models under the assumptions of constant returns-to-scale (CRS) and variable returns-to-scale (VRS) respectively and in the second step, two compensation schemes are developed for centralized allocation plans. An empirical application to the countries in Organization for Economic Co-operation and Development (OECD) is presented to elaborate the main idea.