Customer Locations Research Articles

Developing Cost-effective Operations for the e-Grocery Supply Chain

Cost-effectiveness in the e-grocery supply chain, especially in last mile operations from the distribution centre or store to the customer location, has become a major challenge. The existing e-grocers have developed different kinds of logistical improvements to maintain better customer service and lower costs in the supply chain. However, in spite of the promising development of the e-grocery business, there are only a few e-grocers who have made improvements successfully leading to profitable operations. If e-grocers want to reach a significant market share, they have to achieve lower supply chain costs as well as a wider customer base. To do this, operations in the supply chain have to be improved radically and linked together successfully. In addition, strong supplier and customer relationships are needed. This paper identifies existing operational models and presents suggestions as to how e-grocers can develop more effective operations for the supply chain. The effects of different receiving alternatives, home delivery solutions, services, supplier and customer relationships, demand variation and operations in the distribution centre are studied. Based on benchmarks from existing e-grocers, results from our research and experiences from an e-grocery pilot operation in the Helsinki metropolitan area, we study the best logistical practices for the e-grocery supply chain. In addition, we present one pathway to improve e-grocery efficiency.

Determinants for an entrepreneurial milieu: Science Parks and business policy in growing firms

In order to understand the “ added value” of a Science Park location there is need for detailed research exploring the characteristics and performance of firms located on and off Science Parks. The analysis distinguishes between new technology-based firms on and off Science Parks (273 firms) in Sweden during 1996–1998 in an effort to identify any element of added value which the park provides for the new technology-based firms (NTBFs). The problem of obtaining finance is one of the major difficulties faced by NTBFs (Latent construction: Resources 1). Self-financing is the dominant characteristic of funding in the small-firms sector. The attitudes and motivation of the firm founders and managers is another key factor in the ability to raise funds and achieve high growth and profitability. Information on the location of customers shows whether firms are linked to local, national or international markets, and thus their potential for growth (Latent construction: market innovation). One significant variable is geographical markets (global market). NTBFs (on-Park) have much wider market distribution throughout Sweden and abroad than is typical for small firms.

Optimization and heuristic methods supporting distributed manufacturing

New optimization and heuristic methods are described to address supply chain management problems in distributed manufacturing settings. Specifically, integer programming formulations and heuristic methods are developed to design and evaluate optimal or near-optimal delivery plans for material movements between sites in a truckload trucking environment for the benefit of carriers, customers and professional drivers. The tools developed herein are appropriate for examining delivery needs between suppliers, manufacturers, distribution centres, and customer locations. They are equally applicable to more complex situations involving the return of packaging materials to the original shipment site, or even concurrent consideration of multiple business entities with various shipment profiles. Realistically sized case studies are provided to demonstrate the efficacy of the approaches using data supplied by J.B. Hunt Transport, Inc.

Loop makeup identification via single ended testing: beyond mere loop qualification

Digital subscriber lines (DSLs) offer carriers the possibility of exploiting the existing loop plant to deliver high-speed data and voice services. However, before deploying DSL, local loops must be tested in order to see whether they can support service, and at what level. In fact, there are many impairments that could disqualify a loop for supporting DSL services: load coils, excessive loop length, bridged taps, and wideband noise. Single-ended automatic qualification is essential for achieving low-cost deployment of DSL, since it allows loops to be qualified in bulk and does not involve any human intervention at the customer's location. An even more ambitious challenge is to fully characterize a loop, i.e., to identify its loop makeup. If it is feasible to perform loop makeup identification via single-ended measurements with sufficient accuracy, then operators will benefit substantially because, besides qualifying a loop for DSL service, this capability will allow the updating of telephone company loop-records. These records can in turn be accessed to support engineering, provisioning and maintenance operations. Despite its potential importance, the possibility of achieving loop makeup identification via single-ended measurements is not widely addressed in the current literature. In the present contribution the feasibility of loop makeup identification via single-ended measurements is presented.

Who makes markets

A dealer needs access to order flow and information to make a market profitably in a Nasdaq stock. Several variables that proxy for the stocks that an individual market maker's brokerage customers trade, including volume, location, underwriting participation and analyst coverage, are significant determinants of market making activity. Informational advantages may also factor in the market making decision as evidenced by dealers specializing in industries. These findings suggest that individual dealers have competitive advantages in making markets in specific stocks, and that potential market making competition comes from the dealers who share those advantages rather than all Nasdaq market makers.

Location choice and price discrimination in a duopoly

This paper analyses the problem of price discrimination and product design in a duopoly model with both horizontal and vertical differentiation. Discriminatory contracts are first characterised at each customer location. It is then shown that firms’ locations have a big impact on their discriminatory ability and that equilibrium locations are not monotonic with respect to the heterogeneity parameter for the distribution of consumer preferences over quality; however firms never locate too far away from the first and third quartiles.

Household Switching Behavior at Depository Institutions: Evidence from Survey Data

Understanding household deposit relationships is central to the analysis of competition and the application of merger policy in banking. This article presents descriptive findings from new survey data on households' decisions to change or remain with their providers of checking or savings accounts. The data show that the distribution of household tenure is wide, and that about a third of households have never changed depository institutions. The primary reason reported for changing banks is a household relocation; other reasons are customer service and price factors. Customer service and location are the most frequently cited reasons for remaining with a bank. The importance of location and mobility supports previous survey evidence that the local area is the appropriate market for competitive analysis in banking. The findings presented here are consistent with earlier studies showing that population migration increases competitive pressure on firms and therefore should mitigate the anticompetitive effects of bank mergers.

Algorithms for a Facility Location Problem with Stochastic Customer Demand and Immobile Servers

This paper studies a facility location problem with stochastic customer demand and immobile servers. Motivated by applications to locating bank automated teller machines (ATMs) or Internet mirror sites, these models are developed for situations in which immobile service facilities are congested by stochastic demand originating from nearby customer locations. Customers are assumed to visit the closest open facility. The objective of this problem is to minimize customers' total traveling cost and waiting cost. In addition, there is a restriction on the number of facilities that may be opened and an upper bound on the allowable expected waiting time at a facility. Three heuristic algorithms are developed, including a greedy-dropping procedure, a tabu search approach and an e-optimal branch-and-bound method. These methods are compared computationally on a bank location data set from Amherst, New York.

Deliveries in an Inventory/Routing Problem Using Stochastic Dynamic Programming

An industrial gases tanker vehicle visits n customers on a tour, with a possible (n + 1)st customer added at the end. The amount of needed product at each customer is a known random process, typically a Wiener process. The objective is to adjust dynamically the amount of product provided on scene to each customer so as to minimize total expected costs, comprising costs of earliness, lateness, product shortfall, and returning to the depot nonempty. Earliness costs are computed by invocation of an annualized incremental cost argument. Amounts of product delivered to each customer are not known until the driver is on scene at the customer location, at which point the customer is either restocked to capacity or left with some residual empty capacity, the policy determined by stochastic dynamic programming. The methodology has applications beyond industrial gases.

On a Profit Maximizing Location Model

In this paper we discuss a locational model with a profit-maximizing objective. The model can be illustrated by the following situation. There is a set of potential customers in a given region. A firm enters the market and wants to sell a certain product to this set of customers. The location and demand of each potential customer are assumed to be known. In order to maximize its total profit, the firm has to decide: (1) where to locate its distribution warehouse to serve the customers; (2) the price for its product. Due to existence of competition, each customer holds a reservation price for the product. This reservation price is a decreasing function in the distance to the warehouse. If the actual price is higher than the reservation price, then the customer will turn to some other supplier and hence is lost from the firm's market. The problem of the firm is to find the best location for its warehouse and the best price for its product at the same time in order to maximize the total profit. We show that under certain assumptions on the complexity counts, a special case of this problem can be solved in polynomial time.

Buyer–Supplier Relationships and Customer Firm Costs

Academic literature and business practice are directing increased attention to the importance of creating value in buyer–supplier relationships. One method for creating value is to reduce costs in commercial exchange. The authors develop a model that explains how supplier behaviors and the management of suppliers affect a customer firm's direct product, acquisition, and operations costs. The model proposes that these costs mediate the relationship between buyer–supplier relationship behaviors and the customer firm's intentions to expand future purchases from the supplier. The model is tested on data collected from almost 500 buying organizations in the United States and Germany. The results indicate that increased communication frequency, different forms of supplier accommodation, product quality, and the geographic closeness of the supplier's facilities to the customer's buying location lower customer firm costs. In addition, customer firms intend to increase purchases from suppliers that provide value by lowering each of these costs.

Computer Modeling of the Local Telephone Network

In this paper, we describe the structure and operation of an innovative computer-based model of the local exchange telephone network known as the HCPM. This model can be used in a variety of regulatory arenas, since it provides a regulatory agency with an independent source of information about the forward-looking costs of providing local telephone service. The model can also be used more broadly by governmental agencies in planning for infrastructure development, expanding telephone service to currently unserved areas, or, as in the case of the U.S., designing an efficient universal service program. The HCPM represents an advance over previous models in its ability to build plant to precise customer locations if data are available, while retaining the flexibility of being able to produce good results even with more highly aggregate location data such as those available from the U.S. Census.

A multiperiod two-echelon multicommodity capacitated plant location problem

In this paper we deal with a facility location problem where one desires to establish facilities at two different distribution levels by selecting the time periods. Our model intends to minimize the total cost for meeting demands for all the products specified over the planning horizon at various customer locations while satisfying the capacity requirements of the production plants and intermediate warehouses. We address this problem by means of a formulation as a mixed integer programming problem. A Lagrangean relaxation is proposed to solve the problem, together with a heuristic procedure that constructs feasible solutions of the original problem from the solutions at the lower bounds obtained by the relaxed problems. Computational tests are provided showing the good performance of this approach for a wide range of problems.

Where Does It Happen? The Location of the Production and Consumption of Web Information

Marketing and urban geography notions, such as “service areas,” “catchment areas,” “influence areas,” “central place hierarchy,” and the like, explaining the relationship of the location of customers to stores and service providers, disappeared with the instantaneous, distance-free access to electronic information from anywhere to anywhere. In principle, the untethering from location should have been true not only for information consumption, but also for information production, which is, indeed, the case with e-mail, the production of information on a personal level. However, it is questionable whether global electronic information in the form of Web sites of various kinds, notably commercial Web sites, is also produced in a completely location-independen t pattern. Furthermore, if the production of commercial electronic information is more concentrated, the question arises whether there is any relationship between the location factors of the production of Web information, on the one hand, and the type or content of information produced in given centers of information production, on the other. And, to put supply back in line with demand, one may also ask whether a local specialization in information production also brings about a dominance in information consumption in that place.

A capacitated vehicle routing problem for just-in-time delivery

This paper focuses on the formulation and solution of the problem of planning vehicle routes for material delivery within the premises of a plant working under a just-in-time production system. The unique characteristic of this problem is that the quantity to be delivered at each of the demand nodes is a function of the route taken by the vehicle assigned to serve that node. The problem is modeled by adding a non-linear capacity constraint to the standard vehicle routing model, such that vehicle idle times and inventories at the customer locations are minimized. A heuristic solution procedure is outlined, and the formulation of a lower-bound relaxation is suggested. The performance of the heuristic solution procedure is evaluated in comparison to the lower-bound relaxation, and the heuristic procedure is shown to provide generally good results.

Generating Feasible Schedules for a Pick-up and Delivery Problem

Abstract In this research, we study a transportation problem that involves vehicle routing and driver scheduling for a bus station. The problem requires drivers to provide pick-up and delivery services to customers. Its solution involves planning itineraries for buses and establishing working schedule for drivers, subject to vehicle capacity limitation and time constraints. The objective is to efficiently schedule the fleet of vehicles for customer demand so as to reduce costs. This paper presents a complete constraint model and a solution method for solving the problem. For vehicle routing, a permutation constraint is used to impose a total order for visiting all customer locations regardless of different vehicle routes. This provides a global planning over all routes and plays an important role in the solution method. For driver scheduling, set partitioning constraints are used for assigning drivers and vehicles to requests. Based on this constraint model, efficient reactive planning and optimization algorithms are constructed to generate feasible schedules for the problem.

Optimizing a Ring-Based Private Line Telecommunication Network Using Tabu Search

One of the private line network design problems in the telecommunications industry is to interconnect a set of customer locations through a ring of end offices so as to minimize the total tariff cost and provide reliability. We develop a Tabu Search method for the problem that incorporates long term memory, probabilistic move selections, hierarchical move evaluation, candidate list strategies and an elite solution recovery strategy. Computational results for test data show that the Tabu Search heuristic finds optimal solutions for all test problems that can be solved exactly by a branch-and-cut algorithm, while running about three orders of magnitude faster than the exact algorithm. In addition, for larger size problems that cannot be solved exactly, the tabu search algorithm outperforms the best local search heuristic currently available. The performance gap favoring Tabu Search increases significantly for more difficult problem instances.

Approximation algorithms for minimum tree partition

We consider a problem of locating communication centers. In this problem, it is required to partition the set of n customers into subsets minimizing the length of nets required to connect all the customers to the communication centers. Suppose that communication centers are to be placed in p of the customers locations. The number of customers each center supports is also given. The problem remains to divide a graph into sets of the given sizes, keeping the sum of the spanning trees minimal. The problem is NP-complete, and no polynomial algorithm with bounded error ratio can be given, unless P = NP. We present an approximation algorithm for the problem assuming that the edge lengths satisfy the triangle inequality. It runs in O( p 24 p + n 2) time (n = ¦V¦) and comes within a factor of 2 p− 1 of optimal. When the sets' sizes are all equal this algorithm runs in O( n 2) time. Next, an improved algorithm is presented which obtains as an input a positive integer x ( x⩽ n − p) and runs in O( f( p, x) n 2) time, where f is an exponential function of p and x, and comes within a factor of 2 + (2p−3) x of optimal. When the sets' sizes are all equal it runs in O(2 ( p+ x) n 2) time. A special algorithm is presented for the case p = 2.

INFORMATION DRIVES CHANGE

Most chemical companies are in the middle of what can only be called a revolution in information technology (IT). Information systems are transforming the way business is done in the chemical industry, affecting everything from sending electronic mail to determining the cost of a product to ensuring its delivery at a customer location. The impact of these new information systems is felt differently at each job level. Nevertheless, every employee experiences the immense change that new IT systems bring, whether it means learning how to input sales information, forecasting a production schedule, or completely redefining job functions. Some companies are reorganizing their basic structures because of the new capabilities offered by these information systems. With the huge growth in computing power in recent years, IT gives companies the ability to access and analyze marketing and sales information to an extent never before realized. Now that they have the power to manipulate that information in hand, ...

Traffic descriptor mapping and traffic control for frame relay over ATM network

Frame relay (FR) service via an FR interface over a common asynchronous transfer mode (ATM) backbone network requires an FR-to-ATM interworking unit (IWU), the functionality of which directly impacts the engineering of the overall network in terms of the capacity required, quality of service (QoS) expected, and the interference among different types of services being offered on the same platform. In the absence of a traffic shaping function in the equipment at the customer's location, the issue of policing and bandwidth allocation becomes much more critical. This paper focuses on the issue of FR traffic descriptor mapping, the issue of traffic policing in the frame mode and the cell mode, and the implication on the QoS when the same bandwidth resources are shared by the ATM [cell relay (CR)] and FR virtual connections. Some major conclusions that we draw from the computer simulations are: (1) the performance is somewhat independent of the mode in which traffic policing is implemented; (2) from a cost standpoint it is more advantageous to use the cell mode for traffic policing; (3) the allocation of bandwidth in the multiplexer and the switching fabric is greatly dependent on the type of service interface used since the FR traffic becomes much burstier after frame-to-cell conversion process; and (4) it becomes necessary to provide a traffic shaping function after the conversion process in order to achieve high bandwidth utilization, fair allocation of bandwidth resources, and guaranteed QoS.