Total Cost Model Research Articles

Consider Ordering Strategy Research on Carbon Emissions

This article discussed and studied the enterprises multi-stage ordering policy based on the carbon footprint. Take the companys T-phase ordering strategy in a product cycle as example, and defining the relevant boundary conditions at first. In considering the strict carbon cap case, it need to measure the carbon emissions under the carbon footprint form link to the process of ordering preparing, transportation of purchased products, production process as well as product inventory. It also required add the carbon emissions as constraints to the model for solving the problem with the method that construct the mixed integer linear programming model for total minimum cost which including order preparation costs, acquisition costs, inventory costs and stock costs. Finally, to get the ordering strategy under various conditions, and the results of numerical simulation when the carbon cap line changes.

The Economic Benefit of Electric Taxi Based on Total Ownership Cost Model

To analyze the economic benefit of electric taxi in two different models: battery charging model (ETC) and swapping model (ETS), this paper built total ownership cost model based on purchase and used cost, and equaled the total ownership cost of electric and conventional taxi in the nominal lifetime to get the maximum affordable battery charging price and battery swapping price respectively, which is 1.1 RMB yuan/kWh and 0.54 RMB yuan/km. The results show that ETS has economic advantage over ETC. Adjust the charging and swapping price to 0 RMB yuan, the equilibrium year of ETS is only 0.8 years, compared to ETCs 2.8 years.

Econometric estimations of performance improvements in Kansas feedlot cattle

ABSTRACT Technological changes in the cattle industry may have changed feedlot cattle performance. This study extends the analysis of a 2001 report and examines feedlot performance of steers and heifers using monthly Focus on Feedlots newsletter data from January, 1990, to June, 2012. Cattle performance changes were measured through ADG, G:F, BW gain, and total feeding cost models. Tests for structural breaks revealed multiple breaks for ADG, G:F, and BW gain models and a single break in September, 2008, for the feeding costs model. This break occurred 3 yr after the Renewable Fuels Standard implementation, supporting the hypothesis that corn ethanol production significantly affected feedlot costs. Analysis of ADG, G:F, and BW gain models revealed significant, positive annual growth rate in each model. The positive annual growth rate in cattle performance models suggests increasing feeding efficiencies and higher BW gain. This increasing difference between output and input growth (i.e., finish BW − placement BW) suggests that the cattle-feeding industry, in aggregate, has experienced technological change. This conclusion aligns well with literature touting the benefits of cattle feeding technologies (e.g., β-agonists) and with the expansion of beef production amidst a declining national cowherd.

An Optimal Mixed Batch Shipment Policy for Multiple Items in a Single-Supplier Multiple-Retailer Integrated System

This study addresses mixed batch shipment policy with common replenishment cycle for multiple items in a single-supplier multiple-retailer integrated system. The supplier produces multiple items on a single facility under a common replenishment cycle and delivers products to retailer utilizing a mixed batch shipment policy. The objective is to determine the optimal replenishment cycle, the number of shipments, and the structure of mixed shipment, all of which minimize the integrated total cost per unit time. The single-item isolation model is constructed first, and the single-item isolation model is then integrated into the single-item integration model. Moreover, the single-item integration model is integrated into the multi-item integration model. The minimum total cost model is transformed into a maximum replenishment cycle model to optimize the structure of the mixed batch shipment. The replenishment cycle division method is then developed to obtain the optimal solutions to the subject problem. Examples are presented to illustrate the procedures involved in the replenishment cycle division method.

Simultaneous Optimization of Robust Parameter and Tolerance Design Based on Generalized Linear Models

Robust parameter design (RPD) and tolerance design (TD) are two important stages in design process for quality improvement. Simultaneous optimization of RPD and TD is well established on the basis of linear models with constant variance assumption. However, little attention has been paid to RPD and TD with non‐constant variance of residuals or non‐normal responses. In order to obtain further quality improvement and cost reduction, a hybrid approach for simultaneous optimization of RPD and TD with non‐constant variance or non‐normal responses is proposed from generalized linear models (GLMs). First, the mathematical relationship among the process mean, process variance and control factors, noise factors and tolerances is derived from a dual‐response approach based on GLMs, and the quality loss function integrating with tolerance is developed. Second, the total cost model for RPD‐TD concurrent optimization based on GLMs is proposed to determine the best control factors settings and the optimal tolerance values synchronously, which is solved by genetic algorithm in detail. Finally, the proposed approach is applied into an example of electronic circuit design with non‐constant variance, and the results show that the proposed approach performs better on quality improvement and cost reduction. Copyright © 2012 John Wiley & Sons, Ltd.

Economic–statistical Design of Maximum Exponentially Weighted Moving Average Control Charts

The maximum exponentially weighted moving average (MaxEWMA) control chart effectively combines the two EWMA charts into one chart and monitors both increases and decreases in the mean and/or variability. In this paper, we develop the economic–statistical design of the MaxEWMA control chart in which the Taguchi's quadratic loss function is incorporated into the Duncan's economical model. Numerical simulations are executed to minimize the expected total cost model and determine the optimal decision variables, including the sample size, sampling interval, control limit width, and the smoothing constant of the MaxEWMA control chart. It is shown that the optimal control limit width and smoothing constant increase as the optimal cost value increases and that both the optimal sample size and sampling interval always decrease as the magnitudes of mean and/or variance shifts increase. Copyright © 2012 John Wiley & Sons, Ltd.

Have Spanish port sector reforms during the last two decades been successful? A cost frontier approach

The evolution of the port management model in Spain has been marked by three legislative reforms in the last two decades. This legislation was designed so that the Spanish regulatory framework could embrace the forms of port organization and management that would in turn permit the Spanish ports to function competitively and efficiently, and to be suitably positioned within the distribution systems. This paper aims to analyze the impact of these regulatory changes upon the economic efficiency of the Spanish Port Authorities during 1993–2007 period. To do this, we use a short run total cost model after contrasting that it is the more appropriate because our results suggest that this sector is not in long-run equilibrium. The results demonstrate that the impact of these legislative reforms has not been equal. The most significant changes, in terms of economic efficiency, took place in the first period. The results were also positive for the second period, although the efficiency gains were much more modest. Finally the third legislative reform seemed to have had a contrary effect upon economic efficiency.

Consumer total ownership cost model of plug-in hybrid vehicle in China

This paper used Advisor to define structures and power trains of parallel plug-in hybrid electric vehicles (PHEVs), made two PHEV models that have different battery electric ranges of 20 km and 60 km, established consumer total ownership cost models based on purchase, and used cost and compared with a conventional vehicle (CV) and conventional hybrid vehicles. Then three scenarios were defined – government subsidy (US$2571 for PHEV20 and US$7143 for PHEV60 according to Chinese policy, where in this paper 1 US$ = 7.00 RMB), high oil price (10 per cent annual growth rate), and government subsidy and high oil price – and PHEV market competitiveness was analysed during a 15 year nominal lifecycle. The results show that in the government subsidy scenario a PHEV’s total ownership cost will be lower than that of a CV after 5 years without a battery replacement and 7 years with a battery replacement; in the high oil price scenario it separately needs 6 years and 8 years to show an advantage; in the government subsidy and high oil price, which is the most optimistic scenario, it only respectively needs 4 years and 5 years. It is shown that the government subsidy has a much more obvious effect during the first industrialization stage, but the high oil price has a long time function during the nominal lifecycle and the battery replacement cost is not a sensible factor to include in the PHEV’s total ownership cost.

Practical Economic Statistical Design of ̅<i>X</i> Chart

This paper developed an understandable economic mathematical model of total cost of quality related to the use of control chart. This model considers both statistical quality and cost criteria. The statistical quality constraints considered in this paper are type I error (α) and type II error (β). The total cost of quality is a function of sample size (n) and sampling frequency (f). The model of total cost can be optimized to determine values of n and f that minimize the total cost of quality, while quality level is satisfied. The model can be solved by common spreadsheet program. The economic statistical model is developed under the real situation of a case study company to make the model realistic.

A GIS-based method for identifying the optimal location for a facility to convert forest biomass to biofuel

There is growing interest in the production of biofuels from woody biomass. Critical to the financial success of producing biofuel is identifying the optimal location for the facility. The location decision is especially important for woody biomass feedstock owing to the distributed nature of biomass and the significant costs associated with transportation. This study introduces a two-stage methodology to identify the best location for biofuel production based on multiple attributes. Stage I uses a Geographic Information System approach to identify feasible biofuel facility locations. The approach employs county boundaries, a county-based pulpwood distribution, a population census, city and village distributions, and railroad and state/federal road transportation networks. In Stage II, the preferred location is selected using a total transportation cost model. The methodology is applied to the Upper Peninsula of Michigan to locate a biofuel production facility. Through the application of the two-stage methodology, the best possible location for biofuel production was identified as the Village of L’anse in Baraga County. Also investigated are the sensitivity of transportation cost and the optimal site for biofuel production to changes in several key variables. These additional variables included fuel price, transportation distance, and pulpwood availability. By applying sensitivity analysis based on limited availability of feedstock, the City of Ishpeming emerged as another viable location for the production facility.

Research on the Decision Making of Large Public Building Maintenance Cycle

Combination with the characteristics of large public buildings, taking well considerations of maintenance of buildings on safety and reliability of the circumstances. Decision-making models of the large public building maintenance cycle was proposed based on maintenance of quality comprehensive evaluation. To quantify the degree of recovery of large public buildings based on the quality of maintenance using the method of AHP and Multi-level fuzzy comprehensive evaluation method. To make reasonable amendments on the reliability of experience according to the recovery degree of the reliability. In order to calculate the maintenance cycle of the large public buildings , the two models of maximum reliability and minimum total cost of building structure and equipment pipe components are applying with, and then to making dynamic arrangements of preventive maintenance cycle according to the quality of the maintenance.

Influencia del cumplimiento asociado a la incidencia de eventos cardiovasculares y los costes en combinaciones a dosis fijas en el tratamiento de la hipertensión arterial

To determine the incidence of cardiovascular events (CVE) and health care costs in relation to compliance, persistence and level of blood pressure control when comparing patients treated with single-pill combinations (SPC) or free combinations (FC) for the treatment of hypertension.Observational, multicenter study that included patients>30 years old, from six primary care teams and two hospitals, who started pharmacological treatment for hypertension during 2006. Two study groups were established: SPC (ACEIs/diuretics; ARBs/diuretics) and FC (ACEIs+DIU; ARB+DIU, separately). Main variables studied were sociodemographic data, comorbidity, Charlson-index, compliance, persistence and achievement of therapeutic goals (ESH-ESC criteria). The cumulative incidence of CVE and a total-cost model were determined (differentiating: health/direct; non-health/indirect). Patients were followed for two years. Statistical analysis included logistic regression, Cox proportional hazards model and analysis of covariance. Statistical signification: p<0.05.1,605 patients were recruited, 1,112 (69.3%) receiving SPC and 493 (30.7%) receiving FC, p<0.001; mean age: 69.4 (12.2) years; women: 55.5%. FC treatments were associated with ischaemic heart disease (OR=1.4; 95% CI: 1.1-2.0) and organ failure (OR=1.5; 95% CI: 1.2-2.1), p<0.031. Patients on SPC showed better therapeutic compliance (77.6% vs 71.9%; p<0.001) and longer persistence of treatment (62.1% on-treatment at 24-months [95% CI: 56.3-67.9] vs 49.7% [95% CI: 38.5-60.9]; p<0.001). Optimal control of blood pressure was higher in SPC (48.9% [95% CI: 43.0-54.8] vs 46.7% [95% CI: 35.6-57.8]; p<0.001). Cumulative incidence of cerebrovascular accidents in FC was 4.6% vs 2.4% in SPC; p=0.041. The total health care costs were lower in SPC (1,650.7 € vs 1,674.8 €; p<0.001), including lower specialized care costs (316.1 € vs 382.9 €; p<0.001), fewer hospital admissions and less loss of labour productivity (44.5 € vs 88.4 €; p<0.001).Better compliance and persistence with antihypertensive fixed-dose combinations improves therapeutic control, leading to a significant reduction of cerebrovascular accidents and total health care costs.

An Optimal Inventory Control Model for a Supply Chain with Shortage Constraints

The article studies, with the level constraints in short supply, the inventory decision model of the minimum total annual cost of the supply chain which, composed of a single supplier and multiple buyers, involving supplier’s lead time as a decision variable, replacing the cost of shortages with the level in short supply, and has solved the difficult problem in the practice.

Optimal Intercity Transportation Services With Heterogeneous Demand and Variable Fuel Price

Optimal Intercity Transportation Services With Heterogeneous Demand and Variable Fuel Price

The Implementation of Sampling Plan for Optimal Inspection Allocation in Multi-Station Systems with Consideration of Rework

This study explores sampling plans for optimal inspection allocation in multi-station systems with consideration of rework. After components have processed from each workstation in a serial production system, we can apply different sampling plans for inspection in order to maintain the outgoing quality level. The defective components that are detected at each sampling plan will return to the specific workstation to rework. This study proposes a minimum total cost model with a proper sampling plan after each workstation, which can help people to manager production better.

Considering quality cost, time-value of money, and process quality improvement function in the economic product quantity model

Decision-makers frequently need to develop new strategic plans to correct weaknesses or build new strengths for a changing business condition. Although numerous studies have addressed the economic product quantity problem, most are unable to cope with the defective products identified during processing. While some investigations have considered the cost of defective products, these studies have only considered the two outcomes of acceptance or rejection, and thus fail to accurately reflect the complexity of product quality. Therefore, this study adopts the Taguchi loss function, a kind of quality cost to measure product quality. In addition, many economic product quantity and economic order quantity models cannot accurately predict cost because they ignore the time-value of money, and thus this study employs the time-value of money. Furthermore, this study also considers the exponential process quality improvement function as a method of estimating how investment reduces process variation. As a result, this study considers the quality cost, the time-value of money, and the exponential process quality improvement function in constructing a new total cost model to optimize the production period, and initial investment in process improvement so as to minimize total cost.

On risk and cost in global sourcing

The benefits of global sourcing as part of a firm’s purchasing strategy have been widely discussed in the academic literature, yet so there are few models that provide a comprehensive risk and cost assessment to guide managerial decision-making. In particular, few models capture the dynamic nature of many cost drivers, such as transportation and energy cost, labour cost inflation, or carbon offset costs, in their calculations. In this paper, we define three basic cost elements in global sourcing: static, dynamic and hidden cost, and use this framework to assess the costs and risks inherent in global sourcing scenarios from three different points of view: conceptually, analytically and empirically. We highlight the key learning points from each perspective and propose a total cost model of how to make informed global sourcing decisions, which we test by applying it to three exploratory case studies of global sourcing arrangements.

Life-Cycle Costs of Commercial Roof Systems

The roofing industry in the United States generates annual revenues in excess of $23 billion. This represents a significant annual investment in infrastructure maintenance cost and the opportunity cost of these resources can significantly detract from an owner's ability to invest in other areas. In addition, a failed or failing roof system represents a heightened opportunity for failure in the building envelope and inherently increases the risk of additional costs. Present roof asset management practice typically bases replacement decisions on fixed intervals, inspection results, maintenance issues, and, occasionally, failure risk. This paper develops a model for evaluating occupant costs and considering their impact in the roof management decision process through a total life-cycle cost (LCC) model that includes user/occupant cost model and correlates minimum total cost with improved intervention points in the asset deterioration cycle. The model is estimated from and applied to the extensive roof systems at Carnegie Mellon University in Pittsburgh, Pa. For these roofs, we find that the least cost roof service lives are roughly 30 years, but there can be considerable variation around this average for individual roofs.

Application of cost models over traffic dimensioning with QoS restrictions

Network operators and Internet service providers are offering “Triple Play” products integrating services with different quality of service (QoS) requirements. The provision of QoS guarantees implies the revision of current dimensioning methods and consequences for costing and pricing. This paper proposes a cost model which considers QoS parameters, based on the Total Element Long Run Incremental Cost (TELRIC) model, calculating the cost of a network element and distributing it over the different services whose traffic uses it, taking into account the QoS requirements of each service. For this purpose, three traffic engineering methods are analyzed: complete traffic aggregation by “Over-engineering,” complete traffic segregation by separated virtual tunnels, and partial traffic aggregation by priority queuing. As an example, the cost model is applied to the connection in a Next Generation Network aggregation network for estimating the influence of QoS and traffic engineering on the cost estimation under the TELRIC model.

Optimal Supply Diversification Under General Supply Risks

We analyze a planning model for a firm or public organization that needs to cover uncertain demand for a given item by procuring supplies from multiple sources. The necessity to employ multiple suppliers arises from the fact that when an order is placed with any of the suppliers, only a random fraction of the order size is usable. The model considers a single demand season with a given demand distribution, where all supplies need to be ordered simultaneously before the start of the season. The suppliers differ from one another in terms of their yield distributions, their procurement costs, and capacity levels. The planning model determines which of the potential suppliers are to be retained and what size order is to be placed with each. We consider two versions of the planning model: in the first, the service constraint model (SCM), the orders must be such that the available supply of usable units covers the random demand during the season with (at least) a given probability. In the second version of the model, the total cost model (TCM), the orders are determined so as to minimize the aggregate of procurement costs and end-of-the-season inventory and shortage costs. In the classical inventory model with a single, fully reliable supplier, these two models are known to be equivalent, but the equivalency breaks down under multiple suppliers with unreliable yields. For both the service constraint and total cost models, we develop a highly efficient procedure that generates the optimal set of suppliers as well as the optimal orders to be assigned to each. Most importantly, these procedures generate a variety of important qualitative insights, for example, regarding which sets of suppliers allow for a feasible solution, both when they have ample supply and when they are capacitated, and how various model parameters influence the selected set of suppliers, the aggregate order size, and the optimal cost values.