Supply chain echelons normally base their operational decisions on average values of the parameters that depend on other members. However, in real-life operation the variability of said parameters decreases the link profits. Thus, a cooperative arrangement may be devised in which a link agrees to reduce the variability of its behavior to enhance the performance of other links, receiving compensation in return. This work shows the application of simulation and decision trees to assess the feasibility of this cooperation scheme, from the perspective of the central link of a three member supply chain. First, the operational parameters of the link are optimized for mean values of the variables set by adjacent members. Then, by simulating the system for different probability distributions of these variables, graphs of the expected link gain versus the variances of the distributions are plotted. The results are incorporated to decision trees to evaluate the collaboration feasibility. It was found that the increased variability of the behavior of one neighboring member decreases the benefit of lowering the variability of the behavior of the other. The manuscript closes with a discussion of the practical viability of this collaboration scheme.
This paper presents the evaluation, from a Decision Analysis point of view, of the feasibility of upgrading machinery at an existing metal-forming workshop. The Integral Decision Analysis (IDA) methodology is applied to clarify the decision and develop a decision model. One of the key advantages of the IDA is its careful selection of the problem frame, allowing a correct problem definition. While following most of the original IDA methodology, an addition to this methodology is proposed in this work, that of using the strategic Means-Ends Objective Network as a backbone for the development of the decision model. The constructed decision model uses influence diagrams to include factual operator and vendor expertise, simulation to evaluate the alternatives and a utility function to take into account the risk attitude of the decision maker. Three alternatives are considered: Base (no modification), CNC (installing an automatic lathe) and CF (installation of an automatic milling machine). The results are presented as a graph showing zones in which a particular alternative should be selected. The results show the potential of IDA to tackle technical decisions that are otherwise approached without the due care.
Agro-industrial decision-making is hampered by several, variously-natured, uncertainties. As uncertainty reduction is expensive, the decision modelling process for these industries must strive to use all available information. However, said inclusive effort should be accompanied by an effort to keep modelling assumptions transparent. This work shows the development, from a Value-Focused Thinking perspective, of a model to assess alternatives for improving the operation of a cattle fodder producer. Modelling starts by analyzing and structuring the owner's objectives and proceeds by systematically characterizing, via value judgments or probability distributions, the connections between structured objectives. Constructing the model over a blueprint of connected objectives allows a faithful representation of the understanding of the system behavior while the methodical, one-connection-at-a-time, modelling procedure renders the assumptions used to operationalize each connection visible, facilitating their replacement if more information becomes available. The modelling approach put forward here can support industrial decision making with limited information.
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