Differences between theoretical predictions and operational performance in a stock control application

Over the past decade, several experienced Operational Researchers have advanced the view that the theoretical aspects of model building have raced ahead of the ability of people to use them. Consequently, the impact of Operational Research on commercial organisations and the public sector is limited, and many systems fail to achieve their anticipated benefits in full. The primary objective of this study is to examine a complex interactive Stock Control system, and identify the reasons for the differences between the theoretical expectations and the operational performance. The methodology used is to hypothesise all the possible factors which could cause a divergence between theory and practice, and to evaluate numerically the effect each of these factors has on two main control indices - Service Level and Average Stock Value. Both analytical and empirical methods are used, and simulation is employed extensively. The factors are divided into two main categories for analysis - theoretical imperfections in the model, and the usage of the system by Buyers. No evidence could be found in the literature of any previous attempts to place the differences between theory and practice in a system in quantitative perspective nor, more specifically, to study the effects of Buyer/computer interaction in a Stock Control system. The study reveals that, in general, the human factors influencing performance are of a much higher order of magnitude than the theoretical factors, thus providing objective evidence to support the original premise. The most important finding is that, by judicious intervention into an automatic stock control algorithm, it is possible for Buyers to produce results which not only attain but surpass the algorithmic predictions. However, the complexity and behavioural recalcitrance of these systems are such that an innately numerate, enquiring type of Buyer needs to be inducted to realise the performance potential of the overall man/computer system.

Design of a stock control methodology for use within an oil blending company

The thesis deals with the background, development and description of a mathematical stock control methodology for use within an oil and chemical blending company, where demand and replenishment lead-times are generally non-stationary. The stock control model proper relies on, as input, adaptive forecasts of demand determined for an economical forecast/replenishment period precalculated on an individual stock-item basis. The control procedure is principally that of the continuous review, reorder level type, where the reorder level and reorder quantity 'float', that is, each changes in accordance with changes in demand. Two versions of the Methodology are presented; a cost minimisation version and a service level version. Realising the importance of demand forecasts, four recognised variations of the Trigg and Leach adaptive forecasting routine are examined. A fifth variation, developed, is proposed as part of the stock control methodology. The results of testing the cost minimisation version of the Methodology with historical data, by means of a computerised simulation, are presented together with a description of the simulation used. The performance of the Methodology is in addition compared favourably to a rule-of-thumb approach considered by the Company as an interim solution for reducing stack levels. The contribution of the work to the field of scientific stock control is felt to be significant for the following reasons:- (I) The Methodology is designed specifically for use with non-stationary demand and for this reason alone appears to be unique. (2) The Methodology is unique in its approach and the cost-minimisation version is shown to work successfully with the demand data presented. (3) The Methodology and the thesis as a whole fill an important gap between complex mathematical stock control theory and practical application. A brief description of a computerised order processing/stock monitoring system, designed and implemented as a pre-requisite for the Methodology's practical operation, is presented as an appendix.

The development of a computer simulation model of the interaction between the supply and usage of major components in car assembly you use in stock control

DUE TO COPYRIGHT RESTRICTIONS ONLY AVAILABLE FOR CONSULTATION AT ASTON UNIVERSITY LIBRARY AND INFORMATION SERVICES WITH PRIOR ARRANGEMENT

Computer integrated system for form-roll manufacture

Computer integrated manufacture has brought about great advances in manufacturing technology and its recognition is world wide. Cold roll forming of thin-walled sections, and in particular the design and manufacture of form-rolls, the special tooling used in the cold roll forming process, is but one such area where computer integrated manufacture can make a positive contribution. The work reported in this thesis, concerned with the development of an integrated manufacturing system for assisting the design and manufacture of form-rolls, was undertaken in collaboration with a leading manufacturer of thin-walled sections. A suit of computer programs, written in FORTRAN 77, have been developed to provide computer aids for every aspect of work in form-roll design and manufacture including cost estimation and stock control aids. The first phase of the development programme dealt with the establishment of CAD facilities for form-roll design, comprising the design of the finished section, the flower pattern, the roll design and the interactive roll editor program. Concerning the CAM facilities, dealt with in the second phase, an expert system roll machining processor and a general post-processor have been developed for considering the roll geometry and automatically generating NC tape programs for any required CNC lathe system. These programs have been successfully implemented, as an integrated manufacturing software system, on the VAX 11/750 super-minicomputer with graphics facilities for displaying drawings interactively on the terminal screen. The development of the integrated system has been found beneficial in all aspects of form-roll design and manufacture. Design and manufacturing lead times have been reduced by several weeks, quality has improved considerably and productivity has increased. The work has also demonstrated the promising nature of the expert systems approach to computer integrated manufacture.

Aspects of design for a spare parts provisioning system

This thesis describes an investigation by the author into the spares operation of compare BroomWade Ltd. Whilst the complete system, including the warehousing and distribution functions, was investigated, the thesis concentrates on the provisioning aspect of the spares supply problem. Analysis of the historical data showed the presence of significant fluctuations in all the measures of system performance. Two Industrial Dynamics simulation models were developed to study this phenomena. The models showed that any fluctuation in end customer demand would be amplified as it passed through the distributor and warehouse stock control systems. The evidence from the historical data available supported this view of the system's operation. The models were utilised to determine which parts of the total system could be expected to exert a critical influence on its performance. The lead time parameters of the supply sector were found to be critical and further study showed that the manner in which the lead time changed with work in progress levels was also an important factor. The problem therefore resolved into the design of a spares manufacturing system. Which exhibited the appropriate dynamic performance characteristics. The gross level of entity presentation, inherent in the Industrial Dynamics methodology, was found to limit the value of these models in the development of detail design proposals. Accordingly, an interacting job shop simulation package was developed to allow detailed evaluation of organisational factors on the performance characteristics of a manufacturing system. The package was used to develop a design for a pilot spares production unit. The need for a manufacturing system to perform successfully under conditions of fluctuating demand is not limited to the spares field. Thus, although the spares exercise provides an example of the approach, the concepts and techniques developed can be considered to have broad application throughout batch manufacturing industry.

Studies in the marketing strategy of a U.K. producer of conveyor belts

Research was undertaken in the field of marketing strategy, its formulation and implementation in Dunlop Belting Division. Emphasis was placed on marketing channel strategy, but other strategies including product strategy were studied. The research has resulted in changes in management practice in the client organisation. The relevance of theories of company organisation, planning and strategy, and marketing channels was examined in the light of the research evidence. The technique of action-research was used to gain admittance to and effect change within the client organisation. Case study material was collected for subsequent analysis. The factors affecting marketing strategy formulation in the client organisation were studied. Both the external and the internal business environments were considered. The operation of the observed marketing channels was compared with channel theory. Market segmentation and penetration, and the selling and technical resources of the channels were analysed. Recommendations were made to (a) enlarge and resite the client's distribution unit to locate it centrally in England (b) use the resited unit to secure local advantage (c) obtain greater integration of field sales activities with and from the centre. A new ex-stock distribution unit was established. Improvements to the client's ex-stock marketing in Scotland were also recommended, including improvements to the Scottish distributor's stock control procedure, as well as to Dunlop-Distributor relationships at all levels. The influence of company organisation structure and formalised procedures and systems on the formulation of strategy were considered with respect to channel and product strategy, and other aspects of marketing. Conclusions were drawn that the action research resulted in successful implementation of .agreed changes in the client organisation; that theories of strategy formulation and planning, of the operation of decentralised companies, and of industrial market segmentation required modification; that the theory of marketing channels was found relevant and useful.

Market quality changes in the London Stock Market

This paper examines the impact that the introduction of a closing call auction had on market quality at the London Stock Exchange. Using estimates from the partial adjustment with noise model of Amihud and Mendelson [Amihud, Y., Mendelson, H., 1987. Trading mechanisms and stock returns: An empirical investigation. Journal of Finance 42, 533–553] we show that opening and closing market quality improved for participating stocks. When we stratify our sample securities into five groups based on trading activity we find that the least active securities experience the greatest improvements to market quality. A control sample of stocks are not characterized by discernable changes to market quality.

The effect of universal futures on opening and closing stock market prices

Purpose – In 2001, Euronext-Liffe introduced single security futures contracts for the first time. The purpose of this paper is to examine the impact that these single security futures had on the volatility of the underlying stocks. Design/methodology/approach – The Inclan and Tiao algorithm was used to show that the volatility of underlying securities did not change after universal futures were introduced. Findings – It was found that in the aftermath of the introduction of universal futures the volatility of the underlying securities increases. Increased volatility is not apparent in the control sample. This suggests that single security futures did have some impact on the volatility of the underlying securities. Originality/value – Despite the huge literature that has examined the effects of a futures listing on the volatility of underlying stock returns, little consensus has emerged. This paper adds to the dialogue by focusing on the effects of a single security futures contract rather than concentrating on the effects of index futures contracts.

Egg quality and fecundity in rainbow trout: the determining factors and mechanisms of control

This thesis considers the factors involved in the determination of egg quality and fecundity in farmed stocks of rainbow trout ( Salmo gairdneri R) • Measurements of egg quality, ie. percentage survivals of eggs and fry, from the production batches of eggs of seven fish farms, showed mean survivals of 70% to eying but levels of only 35% to 4.5g fry (approx. 130 days post-fertilisation). Under optimum conditions survivals may reach 85% suggesting that husbandry methods exert significant influences on egg quality. Chemical analyses of the protein, fat, vitellogenin, ash, amino acids, free fatty acid and mineral levels of eggs of varying quality and from parents of different strains showed compositional differences even between individuals of the same stock. However, none of these differences were correlated with egg quality. Egg size showed similar variations but, again under hatchery conditions there was no correlation with differences in egg quality. The only factor which has been shown to exert a significant influence on egg quality is the time of stripping after ovulation. At 1 0°C eggs should be removed from gravid females within ten days of ovulation to achieve optimum egg and fry survival. Studies of egg production from approximately 10,000 broodstock revealed that total fecundity and egg size increased and relative fecundity decreased with increasing fish size. In general, most fish appeared to produce a constant volume of eggs. This is consistent with a hypothesis that egg size can only be increased by parallel reductions in fecundity. Feeding broodstock at half-ration (0.35% body weight day- 1 ) did not affect egg quality but reduced total fecundity and egg size and increased relative fecundity when compared with eggs produced by fish on full-ration. Comparisons of regressions of total fecundity against fish weight for three strains using ANOCO revealed that one strain was significantly more fecund than two other strains considered. Trout of the same strain maintained on different farms behaved similarly suggesting there was some reproducibility of strain characteristics.

The choice of the model in inventory control and the cost of sophistication

This thesis is concerned with the inventory control of items that can be considered independent of one another. The decisions when to order and in what quantity, are the controllable or independent variables in cost expressions which are minimised. The four systems considered are referred to as (Q, R), (nQ,R,T), (M,T) and (M,R,T). Wiith ((Q,R) a fixed quantity Q is ordered each time the order cover (i.e. stock in hand plus on order ) equals or falls below R, the re-order level. With the other three systems reviews are made only at intervals of T. With (nQ,R,T) an order for nQ is placed if on review the inventory cover is less than or equal to R, where n, which is an integer, is chosen at the time so that the new order cover just exceeds R. In (M, T) each order increases the order cover to M. Fnally in (M, R, T) when on review, order cover does not exceed R, enough is ordered to increase it to M. The (Q, R) system is examined at several levels of complexity, so that the theoretical savings in inventory costs obtained with more exact models could be compared with the increases in computational costs. Since the exact model was preferable for the (Q,R) system only exact models were derived for theoretical systems for the other three. Several methods of optimization were tried, but most were found inappropriate for the exact models because of non-convergence. However one method did work for each of the exact models. Demand is considered continuous, and with one exception, the distribution assumed is the normal distribution truncated so that demand is never less than zero. Shortages are assumed to result in backorders, not lost sales. However, the shortage cost is a function of three items, one of which, the backorder cost, may be either a linear, quadratic or an exponential function of the length of time of a backorder, with or without period of grace. Lead times are assumed constant or gamma distributed. Lastly, the actual supply quantity is allowed to be distributed. All the sets of equations were programmed for a KDF 9 computer and the computed performances of the four inventory control procedures are compared under each assurnption.