By using a stochastic supply chain modelling technique this research addresses the myth that more accurate forecast always yields better supply chain performance. A serially linked two-level supply chain model is established to quantify the impact of forecast accuracy on the inventory and production cost in the supply chain. It is suggested that accurate forecasts do not always bring benefit to the supply chain. Instead, for most cases, the total supply chian cost will go up, due to a cost increase at the second level, even though the cost at the first level will decrease.

View full abstract

A new theoretical framework is proposed for the evaluation of projects based on their cash flows and risk probabilities (probabilities of critical failure) associated with their activities. Risk-based project value (RPV) is defined as a summation of realized cash flows and expected cash flows which are discounted by risk probabilities in the future. RPV analysis has three areas of application: (1) go or no-go decision, (2) analysis of risk probability on a project value, and (3) calculation of the value contribution of an activity. The contributed value of an activity to the project is derived from the increase of RPV after the successful completion of the activity. RPV is equivalent to NPV of the DCF method under the condition where risk probabilities are identical for all activities. Case studies illustrate the effectiveness of this theoretical framework.

View full abstract

Active portfolio managers need to have the ability to construct a portfolio which outperforms a market, i.e., a benchmark, using their prediction ability. Many active portfolio managers, however, faced the problem that the exante possibility was different from the ex-post delivery for an active portfolio. The gap comes from the ignorance of the trader's role by portfolio managers. We focused on the role of portfolio managers and traders in order to fill the gap. We propose a method for finding a series of portfolios, each of which can be applicable for practical situations. Our method consists of two steps where the first step is for active portfolio managers, and the second one for traders. This is a realization of the separation of the role of active portfolio managers and traders, strategically.

View full abstract

Ant system algorithm (AS) proposed by Dorigo and others is a new approach for stochastic combinatorial optimization. They applied the proposed methodology to the classical Traveling Salesman Problem (TSP), and reported simulation results. The results show that the AS for TSP was as effective as tabu search and better than simulated annealing. However, when applying this AS to randomly generated graphs, there is a tendency for the solutions obtained using the AS to be trapped in bad solution. Therefore, we attempt to escape bad solution by improving the original AS, using the following strategies. First, we designed a new agent by using intensification and diversification strategies, such as the tabu search applies, in order to obtain better solutions. And, we tried to solve the problem by using new agents with the ability of local search. Furthermore, the parallel ant system algorithm by the above-mentioned new agents was implemented to reduce computational time. Finally we discuss the characteristics of proposed AS.

View full abstract

In this paper, new solution expression and search range grouping rules are proposed for the Stochastic Facility Layout Problem (SFLP). The solution expression is the expansion of the space partitioning method. The new search range grouping rule suppresses long distance delivery as much as possible by limiting the range where AGV searches for delivery request. The objective function of the SFLP is the minimization of average lead time. The throughput is treated as one of the constraints. The average lead time and throughput is calculated by simulation for each solution during the simulated annealing based optimization process. The results of computational experiments show the effectiveness of the proposed algorithm.

View full abstract

In today's uncertain economic environment, the evaluation of safety for economic alternatives is of practical importance. This paper examines the method of quantitatively evaluating profitability and risk using sensitivity coefficients. The paper assumes such factors as unit sales price, volume, unit variable cost, and fixed cost for each economic alternative. It takes into account the balance between production capacity and demand, distinguishing between cases of capacity surplus and shortage. It also takes the factor of yield into consideration. Where production capacity is in surplus, an increase in capacity does not bring about an increase in income, while in cases of production capacity shortage, an increase in capacity results in an increase in contribution margin. This paper investigates the case in which the values of each factor independently move from the originally expected values toward the direction of decreasing profit, and derives sensitivity coefficients for each of the incorporated factors, in cases of both capacity surplus and shortage. The meanings of the derived sensitivity coefficients are examined. Further, the breakeven point for each factor under consideration is derived and indicated on the total-cost unit-cost domain. An area which is safer against unexpected changes in relevant factors is elucidated. Thus, this paper proposes a systematic procedure for evaluating profitability as well as risk for economic alternatives under uncertainties distinguishing between the cases of production capacity surplus and shortage.

View full abstract

In this study we consider a single stage production-inventory system with a single product and continuous review. Information on demand is obtained in advance and it is referred to as advance demand information (ADI). Demand follows a Poisson arrival process and its arrival rate depends on demand lead time, which is the arrival time interval between demand information and the corresponding demand. The processing time follows an exponential distribution. A holding cost is incurred for finished products and a backlog cost occurs if demand is not satisfied. When a finished product is delivered to the customer, the manufacturer receives a reward. We derive the optimal release lead time and base stock level which maximize the total expected average profit which the manufacturer receives. In numerical examples, we investigate a relation between demand lead time and the total expected average profit under the optimal release lead time and base stock level.

View full abstract

The rapid growth of mainland China has attracted foreign investment, especially from Taiwan. Since 2000, the Taiwan Electrical and Electronics Manufacturers' Association (TEEMA) has been investigating the environmental satisfaction and investment risk in China. Good methodology is required to analyze its lengthy questionnaires. This study uses evidential dominance rules for the analysis and compares this with TEEMA's traditional analysis. It is found that evidential dominance rule analysis is a more efficient, clear and better method.

View full abstract

This research intends to explore the influential factors in terms of managerial approaches for successful New Product Development (NPD) and their differences in terms of NPD operations by industries. The New Product Development Scorecard (NPDSC) has been utilized as a self-evaluation tool for 386 participating companies in Japan. Factor analysis was conducted to identify the common influential factors for various industry categories. As a result, three common influential factors which contribute to success in NPD were explored. They are "Development strategy and organization", "Development production technology", and "Utilization capability of tools and IT". The results additionally suggest that the critical NPD operations which contribute to successful NPD are different among groups of industries. The implications in terms of managerial approaches and NPD operations for successful NPD are also summarized.

View full abstract