High value at low cost : Methods for supply chain efficiency

Abstract: This thesis deals with four areas of research: Economic lot scheduling problems (ELSP), Order quantities in a production line, Economic remanufacturing problems, and Performance-based logistics (PBL).The overall purpose of this thesis is to explore and develop methods to increase efficiency insupply chains. More specifically, the aims of this research are: [1] to develop a solutionprocedure that finds a feasible minimum cost production schedule for a ’single machine multiproductprocess’, [2] to investigate how the order quantity affects the performance of aproduction line, [3] to investigate how the yield rate affects the economic remanufacturingquantity under different carbon emission regulations, and [4] to summarise previouslyreported benefits and drawbacks of performance-based logistics and to explore critical aspectsof implementation.The results of the research on the first aim include a mapping of the ELSP field over100 years, a mathematical derivation of the inventory holding cost for solutions with unequalproduction periods, and a solution procedure that can be used to minimise production costsand thus enhance efficiency.The research on the second aim contributes to the understanding on how processparameters affect lead time and production rate in a production line. That knowledge can beused as a guideline for how to handle e.g. order quantity, setup time, work in progressrestrictions and cycle time variations to improve the efficiency of a production line.The results of the research on the third aim include a method to calculate the economicremanufacturing quantity under different carbon emission regulations, which remanufacturerscan use to minimise costs and thus enhance efficiency. This research also contributes to theunderstanding of how the economic remanufacturing quantity is affected by varying yieldrate.Finally, the research on the fourth aim contributes to the understanding of the drivingforces and obstacles of PBL and clarifies relationships to other research fields. The researchsheds light on ’hidden’ costs of PBL and emphasises the need for more evidence regarding theprofitability of PBL, since there is an obvious risk that the cost of e.g. mitigating businessrisks exceeds the gains.Keywords: Economic lot scheduling problems, ELSP, Order quantity, Production lot, EOQ,Production line, Lead time, Remanufacturing, Carbon emission regulation, Yield rate,Performance-based logistics, PBL, Performance contracting, Supply chain integration,Operations management.