R.H. Teunter (Ruud)
http://repub.eur.nl/ppl/968/
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http://repub.eur.nl/
RePub, Erasmus University RepositoryA two-step method for forecasting spare parts demand using information on component repairs
http://repub.eur.nl/pub/76626/
Mon, 16 Jul 2012 00:00:01 GMT<div>W. Romeijnders</div><div>R.H. Teunter</div><div>W.L. van Jaarsveld</div>
Forecasting spare parts demand is notoriously difficult, as demand is typically intermittent and lumpy. Specialized methods such as that by Croston are available, but these are not based on the repair operations that cause the intermittency and lumpiness of demand. In this paper, we do propose a method that, in addition to the demand for spare parts, considers the type of component repaired. This two-step forecasting method separately updates the average number of parts needed per repair and the number of repairs for each type of component. The method is tested in an empirical, comparative study for a service provider in the aviation industry. Our results show that the two-step method is one of the most accurate methods, and that it performs considerably better than Croston's method. Moreover, contrary to other methods, the two-step method can use information on planned maintenance and repair operations to reduce forecasts errors by up to 20%. We derive further analytical and simulation results that help explain the empirical findings.An easy derivation of the order level optimality condition for inventory systems with backordering
http://repub.eur.nl/pub/15482/
Tue, 01 Jul 2008 00:00:01 GMT<div>R.H. Teunter</div><div>R. Dekker</div>
We analyze the classical inventory model with backordering, where the inventory position is controlled by an order level, order quantity policy. The cost for a backorder contains a fixed and a time-proportional component. Demand can be driven by any discrete process. Order lead times may be stochastic and orders are allowed to cross. The optimality condition for the order-level, given some predetermined order quantity, is derived using an easy and insightful marginal cost analysis. It is further shown how this condition can easily be (approximately) rewritten in well-known forms for special cases.Simple heuristics for push and pull remanufacturing policies
http://repub.eur.nl/pub/14822/
Fri, 01 Dec 2006 00:00:01 GMT<div>E.A. van der Laan</div><div>R.H. Teunter</div>
Inventory policies for joint remanufacturing and manufacturing have recently received much attention. Most efforts, though, were related to (optimal) policy structures and numerical optimization, rather than closed form expressions for calculating near optimal policy parameters. The focus of this paper is on the latter. We analyze an inventory system with unit product returns and demands where remanufacturing is the cheaper alternative for manufacturing. Manufacturing is also needed, however, since there are less returns than demands. The cost structure consists of setup costs, holding costs, and backorder costs. Manufacturing and remanufacturing orders have non-zero lead times. To control the system we use certain extensions of the familiar (s, Q) policy, called push and pull remanufacturing policies. For all policies we present simple, closed form formulae for approximating the optimal policy parameters under a cost minimization objective. In an extensive numerical study we show that the proposed formulae lead to near-optimal policy parameters.Dynamic lot sizing with product returns and remanufacturing
http://repub.eur.nl/pub/65260/
Sun, 15 Oct 2006 00:00:01 GMT<div>R.H. Teunter</div><div>Z.P. Bayindir</div><div>W. van den Heuvel</div>
The newsboy problem with resalable returns: A single period model and case study
http://repub.eur.nl/pub/64884/
Thu, 16 Feb 2006 00:00:01 GMT<div>J. Mostard</div><div>R.H. Teunter</div>
We analyze a newsboy problem with resalable returns. A single order is placed before the selling season starts. Purchased products may be returned by the customer for a full refund within a certain time interval. Returned products are resalable, provided they arrive back before the end of the season and are undamaged. Products remaining at the end of the season are salvaged. All demands not met directly are lost. We derive a simple closed-form equation that determines the optimal order quantity given the demand distribution, the probability that a sold product is returned, and all relevant revenues and costs. We illustrate its use with real data from a large catalogue/internet mail order retailer.Value of Information in Closed Loop Supply Chains
http://repub.eur.nl/pub/14821/
Sun, 01 Jan 2006 00:00:01 GMT<div>M.E. Ketzenberg</div><div>E.A. van der Laan</div><div>R.H. Teunter</div>
We explore the value of information (VOI) in the context of a firm that faces uncertainty with respect to demand, product return, and product recovery (yield). The operational decision of interest in matching supply with demand is the quantity of new product to order. Our objective is to evaluate the VOI from reducing one or more types of uncertainties, where value is measured by the reduction in total expected holding and shortage costs. We start with a single period model with normally distributed demands and returns, and restrict the analysis to the value of full information (VOFI) on one or more types of uncertainty. We develop estimators that are predictive of the value and sensitivity of (combinations of) different information types. We find that there is no dominance in value amongst the different types of information, and that there is an additional pay-off from investing in more than one type. We then extend our analysis to the multi-period case, where returns in a period are correlated with demands in the previous period, and study the value of partial information (VOPI) as well as full information. We demonstrate that our results from the single period model (adapted for VOPI) carry-over exactly. Furthermore, a comparison with uniformly distributed demand and return show that these results are robust with respect to distributional assumptions.A note on "Khouja and Park, optimal lot sizing under continuous price decrease, Omega 31 (2003)"
http://repub.eur.nl/pub/63832/
Thu, 01 Dec 2005 00:00:01 GMT<div>R.H. Teunter</div>
Khouja and Park [1] analyze the problem of optimizing the lot size under continuous price decrease. They show that the classic EOQ formula can lead to far from optimal solutions and develop an alternative lot size formula using the software package Mathematica. This formula is more exact, but also more complicated. In this note, we study the net present value formulation of the model, and thereby gain an insight that leads to the proposal of a modified EOQ formula. The modified EOQ formula, albeit not as accurate, is a good alternative to the formula developed by Khouja and Park, especially if mathematical complexity may hamper implementation.The distribution-free newsboy problem with resalable returns
http://repub.eur.nl/pub/11888/
Sun, 18 Sep 2005 00:00:01 GMT<div>J.A.M. Mostard</div><div>M.B.M. de Koster</div><div>R.H. Teunter</div>
We study the case of a catalogue/internet mail order retailer selling style goods and receiving large numbers of commercial returns. Returned products arriving before the end of the selling season can be resold if there is sufficient demand. A single order is placed before the season starts. Excess inventory at the end of the season is salvaged and all demands not met directly are lost. Since little historical information is available, it is impossible to determine the shape of the distribution of demand. Therefore, we analyze the distribution-free newsboy problem with returns, in which only the mean and variance of demand are assumed to be known. We derive a simple closed-form expression for the distribution-free order quantity, which we compare to the optimal order quantities when gross demand is assumed to be normal, lognormal or uniform. We find that the distribution-free order rule performs well when the coefficient of variation (CV) is at most 0.5, but is far from optimal when the CV is large.Dynamic lot sizing with product returns
http://repub.eur.nl/pub/6557/
Mon, 18 Apr 2005 00:00:01 GMT<div>R.H. Teunter</div><div>Z.P. Bayindir</div><div>W. van den Heuvel</div>
We address the dynamic lot sizing problem for systems with product returns. The demand
and return amounts are deterministic over the finite planning horizon. Demands can be
satisfied by manufactured/procured new items, but also by remanufactured returned items.
The objective is to determine those lot sizes for manufacturing and remanufacturing that
minimize the total cost composed of holding cost for returns and serviceable products and
set-ups costs. Two different set-up cost schemes are considered; there is either a joint set-up
cost for manufacturing and remanufacturing (single production line) or separate set-up costs
(dedicated production lines). For the joint set-up cost case, we present an exact, polynomial
time dynamic programming algorithm. For both cases, we propose a number of heuristics
and test them in an extensive numerical study.A comparison of inventory control policies for a joint manufacturing/Remanufacturing environment with remanufacturing yield loss
http://repub.eur.nl/pub/2006/
Thu, 31 Mar 2005 00:00:01 GMT<div>Z.P. Bayindir</div><div>R.H. Teunter</div><div>R. Dekker</div>
We consider a joint manufacturing / remanufacturing environment with remanufacturing yield loss. Demand and return follow independent stationary Poisson processes. Returns can be disposed off upon arrival to the system. Manufacturing and remanufacturing operations performed in the same facility at exponential rates. Yield information becomes available after remanufacturing. Demands that are not directly satisfied are lost. We investigate what inventories to consider when making production and disposal decisions, with the objective of maximizing the long-run average expected profit. Four different policies are compared that base disposal decisions on either the local (returns) inventory or the global inventory, and production decisions on either the local (serviceable) inventory or the global inventory. By modelling the system as a Markov process, expressions for the profit associated with each policy are derived. An extensive numerical study shows that it is always optimal to base disposal decisions on the local inventory and production decisions on the global inventory within the parameter sets considered. A sensitivity analysis reveals further insights.Optimise initial spare parts inventories: an analysis and improvement of an electronic decision tool.
http://repub.eur.nl/pub/1830/
Mon, 20 Dec 2004 00:00:01 GMT<div>M.E. Trimp</div><div>S.M. Sinnema</div><div>R. Dekker</div><div>R.H. Teunter</div>
Control of spare parts is very difficult as demands can be very low (once in a few years is no exception), while the consequences of a stockout can be severe. While in the past many companies choose to have very large spares inventories, one now observe trends in areas with good transportation connections to keep spare parts at the suppliers. Hence it is very important to make a good selection of which spare parts to stock at the start-up of new plants. To this end Shell Global Solutions has developed an electronic decision tool, called E-SPIR. In this report we analyse the decision rules used in it. We consider stockout penalties and advise to use criticality classifications instead. Furthermore, we investigate minimum stock levels, demand distributions and order quantities.Simple heuristics for push and pull remanufacturing policies
http://repub.eur.nl/pub/1786/
Fri, 29 Oct 2004 00:00:01 GMT<div>E.A. van der Laan</div><div>R.H. Teunter</div>
Inventory policies for joint remanufacturing and manufacturing have recently received much
attention. Most efforts, though, were related to (optimal) policy structures and numerical
optimization, rather than closed form expressions for calculating near optimal policy parameters.
The focus of this paper is on the latter. We analyze an inventory system with unit product returns and demands where remanufacturing is the cheaper alternative for manufacturing. Manufacturing is also needed, however, since there are less returns than demands. The cost structure consists of setup costs, holding costs, and backorder costs. Manufacturing and remanufacturing orders have non-zero lead times. To control the system we use certain extensions of the familiar (s,Q) policy, called push and pull remanufacturing policies. For all policies we present simple, closed form formulae for approximating the optimal policy
parameters under a cost minimization objective. In an extensive numerical study we show
that the proposed formulae lead to near-optimal policy parameters.Simple heuristics for push and pull remanufacturing policies
http://repub.eur.nl/pub/1513/
Thu, 19 Aug 2004 00:00:01 GMT<div>E.A. van der Laan</div><div>R.H. Teunter</div>
Inventory policies for joint remanufacturing and manufacturing have recently received much attention. Most efforts, though, were related to (optimal) policy structures and numerical optimization, rather than closed form expressions for calculating near optimal policy parameters. The focus of this paper is on the latter. We analyze an inventory system with unit product returns and demands where remanufacturing is the cheaper alternative for manufacturing. Manufacturing is also needed, however, since there are less returns than demands. The cost structure consists of setup costs, holding costs, and backorder costs. Manufacturing and remanufacturing orders have non-zero lead times. To control the system we use certain extensions of the familiar (s,Q) policy, called push and pull remanufacturing policies. For all policies we present simple, closed form formulae for approximating the optimal policy parameters under a cost minimization objective. In an extensive numerical study we show that the proposed formulae lead to near-optimal policy parameters.The Value of Information in Reverse Logistics
http://repub.eur.nl/pub/1447/
Fri, 06 Aug 2004 00:00:01 GMT<div>M.E. Ketzenberg</div><div>E.A. van der Laan</div><div>R.H. Teunter</div>
We explore the value of information in the context of a remanufacturer that faces uncertainty with respect to demand, product return, and product recovery (yield loss). We assume a single period model in which the operational decision of interest is the quantity of new product to order. Our objective is to evaluate the absolute and relative value of the different types of information that such a firm may choose to invest in order to reduce the uncertainty it experiences in matching supply with demand. The different types of information include demand, return, and yield loss. Our results are extensive and reveal that the value for any specific type of information depends both on the overall level of uncertainty and the level of uncertainty that is attributed to the information for which it explains. We develop and test a theoretical model that is predictive of 1) the value of each type of information, 2) the conditions that give rise to the value for each type of information, and 3) the relative value for each type of information.Lot-sizing for inventory systems with product recovery
http://repub.eur.nl/pub/73952/
Tue, 01 Jun 2004 00:00:01 GMT<div>R.H. Teunter</div>
We study inventory systems with product recovery. Recovered items are as-good-as-new and satisfy the same demands as new items. The demand rate and return fraction are deterministic. The relevant costs are those for ordering recovery lots, for ordering production lots, for holding recoverable items in stock, and for holding new/recovered items in stock. We derive simple formulae that determine the optimal lot sizes for the production/procurement of new items and for the recovery of returned items. These formulae are valid for finite and infinite production rates as well as finite and infinite recovery rates, and therefore more general than those in the literature. Moreover, the method of derivation is easy and insightful.Inventory Strategies for Systems with Fast Remanufacturing
http://repub.eur.nl/pub/14836/
Sat, 01 May 2004 00:00:01 GMT<div>R.H. Teunter</div><div>E.A. van der Laan</div><div>D. Vlachos</div>
We describe hybrid manufacturing/remanufacturing systems with a long lead time for manufacturing and a short lead time for remanufacturing. We review the classes of inventory strategies for hybrid systems in the literature. These are all based on equal lead times. For systems with slow manufacturing and fast remanufacturing, we propose a new class. An extensive numerical experiment shows that the optimal strategy in the new class almost always performs better and often much better than the optimal strategies in all other classes.Profitability of price promotions if stockpilling increases consumption
http://repub.eur.nl/pub/1198/
Fri, 19 Mar 2004 00:00:01 GMT<div>L.H. Teunter</div><div>R.H. Teunter</div>
Price promotions induce consumers to purchase higher-than-usual
quantities, resulting in higher stocks that lead to increased
consumption. We show for a stylized model with a single shop and a
single loyal customer that because of this stockpiling effect,
promotions can be profitable even if they do not attract extra
customers.Determining optimal disassembly and recovery strategies
http://repub.eur.nl/pub/1195/
Thu, 18 Mar 2004 00:00:01 GMT<div>R.H. Teunter</div>
We present a stochastic dynamic programming algorithm for
determining the optimal disassembly and recovery strategy, given
the disassembly tree, the process dependent quality distributions
of assemblies, and the quality dependent recovery options and
associated profits for assemblies. This algorithm generalizes the
one proposed by Krikke et al. \\cite{Krikke98} in two ways. First,
there can be multiple disassembly processes. Second, partial
disassembly is allowed. Both generalizations are important for
practise.A note on "Khouja and Park, optimal lot sizing under continuous decrease, Omega 31 (2003)"
http://repub.eur.nl/pub/1184/
Tue, 09 Mar 2004 00:00:01 GMT<div>R.H. Teunter</div>
Khouja and Park (Omega 31, 539-545, 2003) analyze the problem of optimizing
the lot size under continuous price decrease. They show that the
classic EOQ formula can lead to far from optimal solutions and
develop an alternative lot size formula using the software package
Mathematica. This formula is more exact, but also more
complicated. In this note, we study the net present value
formulation of the model, and thereby gain an insight that leads
to the proposal of a modified EOQ formula. In an extensive
numerical experiment, we show that it leads to nearly optimal
solutions. It is therefore a good alternative to the formula
developed by Khouja and Park, especially if mathematical
complexity may hamper implementation.Logistic planning of rework with deteriorating work-in-process
http://repub.eur.nl/pub/69135/
Mon, 08 Mar 2004 00:00:01 GMT<div>S.D.P. Flapper</div><div>R.H. Teunter</div>
Rework is described as the transformation of production rejects into re-usable products of the same or lower quality. Rework can be very profitable, especially if disposal costs are high and if materials are expensive and limited in availability. Furthermore, rework can contribute to a 'green image'. Although there is quite a lot of literature on logistic planning and control of rework, up to now no attention has been paid to rework of production rejects that deteriorate while waiting to be reworked. Such situations occur, for example, in the food industry. This paper deals with the above in a production line that is dedicated to a single product and that uses the same facilities for production and rework. Produced lots may be non-defective, reworkable defective or non-reworkable defective. Reworkable defective lots deteriorate over time, which effects the rework time and the rework cost. We consider a disposal strategy and two types of rework strategies. We derive expressions for the average profit per time unit, including costs for production, rework, disposal, procurement of input materials, and storage of reworkable defective lots. Using those expressions, the strategies can be compared numerically, as is illustrated for a few examples.