DCORES 2014 Abstracts

Short Papers
Paper Nr: 1

Determining Optimal Discount Policies in B2B Relationships


Viktoryia Buhayenko and Erik van Eikenhorst

Abstract: This research studies which discounts a supplier needs to offer to give incentive to his customers to change their order patterns in a way that minimizes the supplier's total cost. Savings for the supplier arise from reduction of set up and inventory costs. The problem of when and how much discount to offer is not so often addressed in the literature. This approach is very different from the yield management in the fact that if the price changes in one period it will affect the demand in other periods. Two heuristic algorithms have been developed for a one-item non-restricted case with multiple customers. The numerical example shows that although the demand doesn’t change and the revenue of the supplier decreases because of the discounts offered, the supplier gets higher profit.

Paper Nr: 2

Sourcing Decisions for Goods with Potentially Imperfect Quality under the Presence of Supply Disruption


Laura Wagner and Mustafa Çagri Gürbüz

Abstract: Dispensers (pharmacies, hospitals etc.), time and again, are faced with multiple uncertainties like demand variability, supply disruptions etc. These periods of uncertainties are exploited by some distributors to breach regulated supply chains and push sub-quality and/or non-deceptive counterfeit medicines, forcing dispensers to identify and implement measures for detection to mitigate social and financial costs. In this paper, we attempt to study dispensers’ operational replenishment policies, during times of such uncertainties, under two counterfeit detection methods: a) Post-consumption detection — Counterfeit identification based on end-consumer and medical personnel’s feedback b) Inspection prior to circulation— implementing a track-and-trace system to find the origin of doubtful medicines at the time of purchasing. In each of the two situations, we determine which strategy --single sourcing, multi-sourcing or waiting for shortage to end-- is valuable to safeguard against spurious drugs, and quantify the optimal procurement allocation to each source in a multi-supplier and multi-period setting. Intriguingly, we found cases where a cost-minimizing dispenser may lean more on post-consumption detection than inspection prior to circulation.

Paper Nr: 3

A Tabu Search Heuristic for the Heterogeneous Vehicle Routing Problem on a Multi-graph


David S. W. Lai and Ozgun C. Demirag

Abstract: This paper addresses the Heterogeneous Vehicle Routing Problem (HVRP) where a mixed fleet of vehicles, having distinct vehicle capacities, fixed costs and travel costs, is used to serve a set of customers. With the presence of parallel arcs in the underlying graph, many simple operations in classical heuristics become difficult optimization subproblems. We present an insertion-based heuristic and a tabu search heuristic for obtaining near-optimal solutions in a short time. Insertion costs are estimated with customer sequencing and arc selection efficiently. Extensive computational tests have been performed for sensitivity analysis.