MRO inventory reduction—challenges and management: a case study of the Tennessee Valley Authority

Emphasis on maintenance, repair, and operations inventory (or MRO inventory) can lead to improved inventory control, reduced operational costs, enhanced productivity, and increased cost accounting accuracy. To review the benefits of MRO inventory reduction, as well as highlight the management challenges associated with the process, a case study of the Tennessee Valley Authority (TVA) is presented. TVA is a not-for-profit electric power generation entity. TVA standardised inventory policies and procedures. Their comprehensive five-year plan included employee training, changes in organisational structure and strategy, reduced MRO inventories and the establishment of new growth drivers. Net inventory reductions of $47 million were realised. Suggestions for future MRO inventory reductions as well as replication of the management involvement and improvement process in other organisations are included.     

A Longitudinal Study of the Effects of Social Support on the Psychological Adjustment of Divorced Mothers

Social support has been frequently hypothesized as a significant moderating influence on the adverse consequences of marital disruption. This exploratory longitudinal study examined the impact of social support on the psychological adjustment of divorced mothers. Divorced mothers provided social network information and psychological adjustment profiles at two months and six months following divorce. Results indicate that there were major changes in the structural and interactional characteristics of the participants' social networks over time. Some types of social support were related to well-being and several structural and interactional characteristics of the social network were related to adjustment.     

Inventory routing problems in a context of vendor-managed inventory system with consignment stock and transshipment

The inventory routing problem involves the integration and the coordination of two components of the logistics value chain: the inventory management and the vehicle routing decisions. In fact, the aim is to jointly decide on the distribution tour, from a distribution centre to a set of locations, and on the inventory policy for each location. Although many research investigations show great interest in policies such as transshipment or dynamic routings on the distribution system performances, these approaches are often criticised in practice as being too restrictive. In this article, we consider the inventory routing framework in a supplier integration context, i.e. a vendor-managed inventory with a consignment stock policy. Under such framework, we show that the transshipment brings more benefits than the classical context. In particular, we consider the case of static routings and we numerically show that transshipment permits to better optimise the distribution tours and to improve the global performance of the supply network.     

统一授信模式下存货组合与循环质押融资决策

存货质押融资已成为当前中小企业获得融资的重要手段.存货组合与循环质押是近几年存货质押融资业务实践中出现的新模式,尚未引起学者的足够重视.基于此,文章致力于探讨存货组合与循环质押融资的决策问题.首先制定存货组合质押与循环置换的规则,然后根据规则分别建立相应的线性规划函数,并通过算例进行数值分析,演示存货组合与循环质押融资决策过程,为广大融资企业开展存货质押融资业务提供借鉴.     

Sizing Inventory When Lead Time and Demand are Correlated

Determining appropriate inventory levels has been a subject of interest for both researchers and practitioners. Standard practice is to treat lead time demand as a random sum of random numbers and rely on established probability theory to calculate both reorder point and safety stock levels. A key assumption in these calculations, however, is that lead time and demand are not correlated. In this paper, we first explore situations where this assumption is untrue and then develop equations to determine the reorder point and the safety stock when lead time and demand are correlated. More specifically, we (1) derive formulas for the average and variance of the demand in a lead time, which can then be used to calculate the reorder point and the safety stock, (2) apply these formulas to two distributions for which there is a closed‐form solution: normal and Poisson, and (3) examine the effect of correlation on safety stock requirements under the normal distribution.     

A Depository Institution's Optimal Currency Supply Network Under the Fed's New Guidelines: Operating Policies,Logistics, and Impact

The overuse of its currency processing operations by depository institutions (DIs) has motivated the Federal Reserve (Fed) to propose new currency recirculation guidelines. The Fed believes that DIs should play a more active role in recirculating fit (i.e., usable) currency so that the societal cost of providing currency to the public is minimized. The Fed characterizes the overuse by the extent of cross shipping, a practice in which the same DI deposits and withdraws currency of the same denomination within five business days in the same geographic region. The Fed's proposal encourages DIs to fit sort and reuse deposited currency through two components: a custodial inventory program and a recirculation fee that would be charged on withdrawals of cross‐shipped currency. Given the geographical network of the various branches of a DI, the extent of its participation in the proposed programs depends on a variety of factors: the nature of demand and supply of currency, number and locations of the processing centers, and the resulting fit‐sorting, holding, and transportation costs. The interrelated nature of these decisions motivates the need for an integrated model that captures the flow of currency in the entire network of the DI. Based on our work with Brink's Inc., a leading secure‐logistics provider, we develop a mixed‐integer linear programming (MILP) model to provide managers of DIs with a decision‐making tool under the Fed's new guidelines. Broadly, we analyze the following questions: (i) Over all typical practical realizations of the demand for currency that a DI may face, and over all reasonable cost implications, is there a menu of “good” operating policies? (ii) What is the monetary impact of fit‐sorting and custodial inventories on a DI? and (iii) To what extent will the Fed's new guidelines address its main goal, namely, a reduction in the practice of cross shipping by encouraging DIs to recirculate currency?     

On the Benefits of Risk Pooling in Inventory Management

We analyze the benefits of inventory pooling in a multi‐location newsvendor framework. Using a number of common demand distributions, as well as the distribution‐free approximation, we compare the centralized (pooled) system with the decentralized (non‐pooled) system. We investigate the sensitivity of the absolute and relative reduction in costs to the variability of demand and to the number of locations (facilities) being pooled. We show that for the distributions considered, the absolute benefit of risk pooling increases with variability, and the relative benefit stays fairly constant, as long as the coefficient of variation of demand stays in the low range. However, under high‐variability conditions, both measures decrease to zero as the demand variability is increased. We show, through analytical results and computational experiments, that these effects are due to the different operating regimes exhibited by the system under different levels of variability: as the variability is increased, the system switches from the normal operation to the effective and then complete shutdown regimes; the decrease in the benefits of risk pooling is associated with the two latter stages. The centralization allows the system to remain in the normal operation regime under higher levels of variability compared to the decentralized system.     

Shelf Space Management When Demand Depends on the Inventory Level

Two factors that their influence on the demand has been investigated in many papers are (i) the shelf space allocated to a product and to its complement or supplement products and (ii) the instantaneous inventory level seen by customers. Here we analyze the joint shelf space allocation and inventory decisions for multiple items with demand that depends on both factors. The traditional approach to solve inventory models with a state‐dependent demand rate uses a time domain approach. However, this approach often does not lead to closed‐form expressions for the profit rate with both dependencies. We analyze the problem in the inventory domain via level crossing theory. This approach leads to closed‐form expressions for a large set of demand rate functions exhibiting both dependencies. These closed‐form expressions substantially simplify the search for optimal solutions; thus we use them to solve the joint inventory control and shelf space allocation problem. We consider examples with two products to investigate the significance of capturing both demand dependencies. We show that in some settings it is important to capture both dependencies. We consider two heuristics, each one of them ignores one of the two dependencies. Using these heuristics it seems that ignoring the dependency on the shelf space might be less harmful than ignoring the dependency on the inventory level, which, based on computational results, can lead to profit losses of more than 6%. We demonstrate that retailers should use their operational control, e.g., reorder point, to promote higher demand products.     

An Efficient and Robust Design for Transshipment Networks

Transshipment, the sharing of inventory among parties at the same echelon level of a supply chain, can be used to reduce costs. The effectiveness of transshipment is in part determined by the configuration of the transshipment network. We introduce chain configurations in transshipment settings, where every party is linked in one connected loop. Under simplifying assumptions we show analytically that the chain configuration is superior to configurations suggested in the literature. In addition, we demonstrate the efficiency and robustness of chain configurations for more general scenarios and provide managerial insights regarding preferred configurations for different problem parameters.