Inventory Routing - A Strategic Management Accounting Perspective

This dissertation develops a strategic management accounting perspective of inventory routing. The thesis studies the drivers of cost efficiency gains by identifying the role of the underlying cost structure, demand, information sharing, forecasting accuracy, service levels, vehicle fleet, planning horizon and other strategic factors as well as the interaction effects among these factors with respect to performance outcomes. The task is to enhance the knowledge of the strategic situations that favor the implementation of inventory routing systems, understanding cause-and-effect relationships, linkages and gaining a holistic view of the value proposition of inventory routing. The thesis applies an exploratory case study design, which is based on normative quantitative empirical research using optimization, simulation and factor analysis. Data and results are drawn from a real world application to cash supply chains. The first research paper shows that performance gains require a common cost component and cannot be explained by simple linear or affine cost structures. Inventory management and distribution decisions become separable in the absence of a set-dependent cost structure, and neither economies of scope nor coordination problems are present in this case. The second research paper analyzes whether information sharing improves the overall forecasting accuracy. Analysis suggests that the potential for information sharing is limited to coordination of replenishments and that central information do not yield more accurate forecasts based on joint forecasting. The third research paper develops a novel formulation of the stochastic inventory routing model that accounts for minimal service levels and forecasting accuracy. The developed model allows studying the interaction of minimal service levels and forecasting accuracy with the underlying cost structure in inventory routing. Interestingly, results show that the factors minimal service level and forecasting accuracy are not statistically significant, and subsequently not relevant for the strategic decision problem to introduce inventory routing, or in other words, to effectively internalize inventory management and distribution decisions at the supplier. Consequently the main contribution of this thesis is the result that cost benefits of inventory routing are derived from the joint decision model that accounts for the underlying set-dependent cost structure rather than the level of information sharing. This result suggests that the value of information sharing of demand and inventory data is likely to be overstated in prior literature. In other words, cost benefits of inventory routing are primarily determined by the cost structure (i.e. level of fixed costs and transportation costs) rather than the level of information sharing, joint forecasting, forecasting accuracy or service levels.

Aspiration-based utility functions in a planning model for timber flow management.

The study presents a theory of utility models based on aspiration levels, as well as the application of this theory to the planning of timber flow economics. The first part of the study comprises a derivation of the utility-theoretic basis for the application of aspiration levels. Two basic models are dealt with: the additive and the multiplicative. Applied here solely for partial utility functions, aspiration and reservation levels are interpreted as defining piecewisely linear functions. The standpoint of the choices of the decision-maker is emphasized by the use of indifference curves. The second part of the study introduces a model for the management of timber flows. The model is based on the assumption that the decision-maker is willing to specify a shape of income flow which is different from that of the capital-theoretic optimum. The utility model comprises four aspiration-based compound utility functions. The theory and the flow model are tested numerically by computations covering three forest holdings. The results show that the additive model is sensitive even to slight changes in relative importances and aspiration levels. This applies particularly to nearly linear production possibility boundaries of monetary variables. The multiplicative model, on the other hand, is stable because it generates strictly convex indifference curves. Due to a higher marginal rate of substitution, the multiplicative model implies a stronger dependence on forest management than the additive function. For income trajectory optimization, a method utilizing an income trajectory index is more efficient than one based on the use of aspiration levels per management period. Smooth trajectories can be attained by squaring the deviations of the feasible trajectories from the desired one.

A participatory approach to tactical forest planning.

The paper examines the needs, premises and criteria for effective public participation in tactical forest planning. A method for participatory forest planning utilizing the techniques of preference analysis, professional expertise and heuristic optimization is introduced. The techniques do not cover the whole process of participatory planning, but are applied as a tool constituting the numerical core for decision support. The complexity of multi-resource management is addressed by hierarchical decision analysis which assesses the public values, preferences and decision criteria toward the planning situation. An optimal management plan is sought using heuristic optimization. The plan can further be improved through mutual negotiations, if necessary. The use of the approach is demonstrated with an illustrative example, it's merits and challenges for participatory forest planning and decision making are discussed and a model for applying it in general forest planning context is depicted. By using the approach, valuable information can be obtained about public preferences and the effects of taking them into consideration on the choice of the combination of standwise treatment proposals for a forest area. Participatory forest planning calculations, carried out by the approach presented in the paper, can be utilized in conflict management and in developing compromises between competing interests.

Pre-harvest measurement of pine stands for sawing production planning.

To enhance the utilization of the wood, the sawmills are forced to place more emphasis on planning to master the whole production chain from the forest to the end product. One significant obstacle to integrating the forest-sawmill-market production chain is the lack of appropriate information about forest stands. Since the wood procurement point of view in forest planning systems has been almost totally disregarded there has been a great need to develop an easy and efficient pre-harvest measurement method, allowing separate measurement of stands prior to harvesting. The main purpose of this study was to develop a measurement method for pine stands which forest managers could use in describing the properties of the standing trees for sawing production planning. Study materials were collected from ten Scots pine stands (Pinus sylvestris) located in North Häme and South Pohjanmaa, in southern Finland. The data comprise test sawing data on 314 pine stems, dbh and height measures of all trees and measures of the quality parameters of pine sawlog stems in all ten study stands as well as the locations of all trees in six stands. The study was divided into four sub-studies which deal with pine quality prediction, construction of diameter and dead branch height distributions, sampling designs and applying height and crown height models. The final proposal for the pre-harvest measurement method is a synthesis of the individual sub-studies. Quality analysis resulted in choosing dbh, distance from stump height to the first dead branch (dead branch height), crown height and tree height as the most appropriate quality characteristics of Scots pine. Dbh and dead branch height are measured from each pine sample tree while height and crown height are derived from dbh measures by aid of mixed height and crown height models. Pine and spruce diameter distribution as well as dead branch height distribution are most effectively predicted by the kernel function. Roughly 25 sample trees seems to be appropriate in pure pine stands. In mixed stands the number of sample trees needs to be increased in proportion to the intensity of pines in order to attain the same level of accuracy.

Estimation of cutting volume with three inventory methods for harvest planning in Canadian boreal forests.

Two methods of pre-harvest inventory were designed and tested on three cutting sites containing a total of 197 500 m3 of wood. These sites were located on flat-ground boreal forests located in northwestern Quebec. Both methods studied involved scaling of trees harvested to clear the road path one year (or more) prior to harvest of adjacent cut-blocks. The first method (ROAD) considers the total road right-of-way volume divided by the total road area cleared. The resulting volume per hectare is then multiplied by the total cut-block area scheduled for harvest during the following year to obtain the total estimated cutting volume. The second method (STRATIFIED) also involves scaling of trees cleared from the road. However, in STRATIFIED, log scaling data are stratified by forest stand location. A volume per hectare is calculated for each stretch of road that crosses a single forest stand. This volume per hectare is then multiplied by the remaining area of the same forest stand scheduled for harvest one year later. The sum of all resulting estimated volumes per stand gives the total estimated cutting-volume for all cut-blocks adjacent to the studied road. A third method (MNR) was also used to estimate cut-volumes of the sites studied. This method represents the actual existing technique for estimating cutting volume in the province of Quebec. It involves summing the cut volume for all forest stands. The cut volume is estimated by multiplying the area of each stand by its estimated volume per hectare obtained from standard stock tables provided by the governement. The resulting total estimated volume per cut-block for all three methods was then compared with the actual measured cut-block volume (MEASURED). This analysis revealed a significant difference between MEASURED and MNR methods with the MNR volume estimate being 30 % higher than MEASURED. However, no significant difference from MEASURED was observed for volume estimates for the ROAD and STRATIFIED methods which respectively had estimated cutting volumes 19 % and 5 % lower than MEASURED. Thus the ROAD and STRATIFIED methods are good ways to estimate cut-block volumes after road right-of-way harvest for conditions similar to those examined in this study.

Helsingin seudun ruuhkamaksut yritysnäkökulmasta

Congestion of traffic is one of the biggest challenges for urban cities in global perspective. Car traffic and traffic jams are causing major problems and the congestion is predicted to worsen in the future. The greenhouse effect has caused a severe threat to the environment globally. On the other hand from the point of view of companies and other economic parties time and money has been lost because of the congestion of traffic. This work studies some possible traffic payment systems for the Helsinki Metropolitan area introducing three optional models and concentrating on the point of view of the economic parties. Central part of this work is formed by a research questionnaire, which was conducted among companies located in the Helsinki area and where more than 1000 responses were gained. The study researches the approaches of the respondents to the area s current traffic system, its development and urban congestion pricing and the answers are analyzed according to the size, industry and location of the companies. The economic aspect is studied by economic theory of industrial location and by emphasizing the meaning of smoothly running traffic for the economic world. Chapter three presents detailed information about traffic congestion, how today s car-centered society has been formed, what concrete things congestion means for economic life and how traffic congestion can be limited. Theoretically it is examined how urban traffic payment systems are working using examples from London and Stockholm where successful traffic payment experiences exist. The literature review analyzes urban development, increasing car traffic and Helsinki Metropolitan area on a structural point of view. The fourth chapter introduces a case study, which concentrates on Helsinki Metropolitan area s different structures, the congestion situation in Helsinki and the introduction of the traffic payment system clarification. Currently the region is experiencing a phase where big changes are happening in the planning of traffic. The traffic systems are being unified to consider the whole region in the future. Also different advices for the increasing traffic congestion problems are needed. Chapter five concentrates on the questionnaire and theme interviews and introduces the research findings. The respondents overall opinion of the traffic payments is quite skeptical. There were some regional differences found and especially taxi, bus and cargo and transit enterprises shared the most negative opinion. Economic parties were worried especially because of the traffic congestion is causing harm for the business travel and the employees traveling to and from work. According to the respondents the best option from the traffic payment models was the ring model where the payment places would be situated inside the Ring Road III. Both the company representatives and other key decision makers see public transportation as a good and powerful tool to decrease traffic congestion. The only question, which remains, is where to find investors willing to invest in public transportation if economic representatives do not believe in pricing the traffic by for example traffic payment systems.

Water quality assessment in water protection planning

Yhteenveto: Veden laadun arviointi vesiensuojelun suunnittelussa

Private and municipal forests and the forestry planning system in Japan - trends and problems after World War II.

XVIII IUFRO World Congress, Ljubljana 1986.

Koti keskellä kaupunkia : Keskusta lapsiperheen asuinalueena, esimerkkeinä Tukholma ja Helsinki

Families with children have traditionally moved to suburbs. In the last 20 years a modest counter process has however been recognized. Families with an urban lifestyle stay in the city centres. This study looks at the phenomenon through two cases, Stockholm and Helsinki. In the first case it has already been observed that the city centre has grown in popularity among families with children. Therefore it serves as a basis for the study and as well as a point of comparison. Stockholm’s city centre is expanding as new neighbourhoods have been built and are being planned. In the city centre of Helsinki the building of two large neighbourhoods for 30 000 inhabitants will start in a few years. The first aim of the study is to look closer at what has really happened in the city centre of Stockholm, why families choose to live there with their children and how the City of Stockholm has reacted to the change. The main sources of information are secondary sources, statistics and interviews with planners, politicians and experts in the field. The main object is to look at the situation in the city centre of Helsinki. Can a preference for urban residential environments be observed in Helsinki? What are the reasons for a family to choose the city centre as a living place? How does the everyday life of a family in the city centre appear? How are these families taken into account in the planning of the city? The main sources of information here are statistics, interviews with dwellers in the neighbourhood Kruununhaka and interviews with planners. In Stockholm the birth rate has grown constantly during the 2000s and is highest in the city centre. Some of the families still move elsewhere, but many of them do not. One of the most important reasons for living in the city centre is short working distances which give working parents more time with their children. Another reason is a preference of an urban, active lifestyle. Families prefer to live close to everything, childcare, schools, shops and entertainments. The popularity of the city centre among families with children has taken politicians and planners by surprise. Helsinki has not experienced a baby boom like Stockholm. However the negative changes in the birth rate have been more modest in the central areas than in the suburbs. Statistics show, that many families move away from the city centre as the children grow. Families who stay in the city centre especially appreciate closeness to public and private services and good public transportation which means that they are not dependent on using the car. Further they find that the city centre has a tolerant climate and is a safe and beautiful place to live in. The families enjoy the social life of the neighbourhood and feel that it makes a good climate to raise children in. However they are concerned with traffic safety and the lack of stimulus in the playgrounds of the neighbourhood parks. Two large neighbourhoods with homes for about 30 000 inhabitants are now planned in the former Port Districts in the city centre of Helsinki. The other one, Jätkäsaari has been planned to become an attractive alternative for families with children. Traffic safety has been one of the main objects for the planning. The other, Kalasatama, has been planned to attract all groups in society.

Accessibility as a determinant of opportunities : A case study from Peruvian Amazonia

Accessibility is a crucial factor for interaction between areas in economic, cultural, political and environmental terms. Therefore, information concerning accessibility is relevant for informed decision making, planning and research. The Loreto region in the Peruvian Amazonia provides an interesting scene for an accessibility study. Loreto is sparsely populated and because there are few roads in the region, in practice all movement and transportation happens along the river network. Due to the proximity of the Andes, river dynamics are strong and annual changes in water level combined with these dynamic processes constantly reshape accessibility patterns of the region. Selling non-timber forest products (NTFP) and agricultural products (AP) in regional centres is an important income source for local rain forest dwellers. Thus, accessibility to the centres is crucial for the livelihood of local population. -- In this thesis I studied how accessible the regional centre Iquitos is from other parts of Loreto. In addition, I studied the regional NTFP/AP trade patterns and compared them with patterns of accessibility. Based on GPS-measurements, using GIS, I created a time-distance surface covering Loreto. This surface describes the time-distance to Iquitos, along the river network. Based on interview material, I assessed annual changes to accessibility patterns in the region. The most common regional NTFP/AP were classified according to the amount of time they can be preserved, and based on the accessibility surface, I modelled a catchment area for each of these product classes. -- According to my results, navigation speeds vary considerably in different parts of the river network, depending on river types, vessels, flow direction and season. Navigating downstream is, generally, faster than upstream navigation. Thus, Iquitos is better accessible from areas situated south and south west of the city, like along the rivers Ucayali and Marañon. Differences in accessibility between different seasons are also substantial: during the dry season navigation is slower due to lower water levels and emerging sand bars. Regularly operating boats follow routes only along certain rivers and close to Iquitos transport facilities are more abundant than in more distant areas. Most of the products present in Iquitos market places are agricultural products, and the share of NTFP is significantly smaller. Most of the products were classified in product class 2, and the catchment area for these products is rather small. Many products also belonged to class 5, and the catchment area for these products reaches up to the edges of my study area, following the patterns of the river network. -- The accessibility model created in this study predicts travel times relatively well, although in some cases the modelled time-distances are substantially shorter than observed time-distances. This is partly caused by the fact that real-life navigation routes are more complicated than the modelled routes. Rain forest dwellers having easier access to Iquitos have more opportunities in terms of the products they decide to market. Thus, they can better take advantage of other factors affecting the market potential of different products. -- In all, understanding spatial variation in accessibility is important. In the Amazonian context it is difficult to combine the accessibility-related needs of the local dwellers with conservation purposes and the future challenge lies in finding solution that satisfy both of these needs.