Analyzing the proliferation of item‐level RFID, recent studies have identified the cost sharing of the technology as a gating issue. Various qualitative studies have predicted that conflict will arise, in particular in decentralized supply chains, from the fact that the benefits and the costs resulting from item‐level RFID are not symmetrically distributed among supply chain partners. To contribute to a better understanding of this situation, we consider a supply chain with one manufacturer and one retailer. Within the context of this retail supply chain, we present analytic models of the benefits of item‐level RFID to both supply chain partners. We examine both the case of a dominant manufacturer as well as the case of a dominant retailer, and we analyze the results of an introduction of item‐level RFID to such a supply chain depending on these market power characteristics. Under each scenario, we show how the cost of item‐level RFID should be allocated among supply chain partners such that supply chain profit is optimized.
W e address the use and value of time and temperature information to manage perishables in the context of a retailer that sells a random lifetime product subject to stochastic demand and lost sales. The product's lifetime is largely determined by the temperature history and the flow time through the supply chain. We compare the case in which information on flow time and temperature history is available and used for inventory management to a base case in which such information is not available. We formulate the two cases as Markov Decision Processes and evaluate the value of information through an extensive simulation using representative, real world supply chain parameters.
T echnologies such as radio-frequency identification and global positioning systems can provide improved real-time tracking information for products and replenishment orders along the supply chain. We call this type of visibility order progress information. In this paper, we investigate how order progress information can be used to improve inventory replenishment decisions. To this end, we examine a retailer facing a stochastic lead time for order fulfillment. We characterize a replenishment policy that is based on the classical Q R policy and that allows for releasing emergency orders in response to the order progress information. We show that the optimal structure of this policy is given by a sequence of threshold values dependent on order progress information. In a numerical study we evaluate the cost savings due to this improved replenishment policy.
This paper proposes a layered container inspection system for detecting illicit nuclear materials using radiography information. We argue that the current inspection system, relying heavily on the Automated Targeting System (ATS) and passive radiation detectors, is inherently incapable of reliably detecting shielded radioactive materials, especially highly enriched uranium (HEU). This motivates the development of a new inspection system, which is designed to address a fundamental flaw of the ATS-based system, allowing for improved defense against sophisticated adversaries. In the proposed inspection system, all cargo containers go through x-ray imaging equipment first. From the x-ray image, a hardness measure of the container is computed. This hardness measure characterizes how likely it is that shielded HEU, if it does exist in the container, will not be detected in a subsequent passive detection step. Depending on the value of the hardness, the lower-hardness containers are sent to passive detection and the high-hardness containers are sent directly to active detection. This paper explores the trade-off between the detection probability of the new inspection system and the expected sojourn time a container spends in the system. The solution details and decision-making tools for using such a system are provided. Comparisons are made between the proposed system and the current ATS-based nuclear inspection system.
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