research article an optimal method for developing global
TRANSCRIPT
Hindawi Publishing CorporationJournal of OptimizationVolume 2013 Article ID 197370 14 pageshttpdxdoiorg1011552013197370
Research ArticleAn Optimal Method for Developing Global Supply ChainManagement System
Hao-Chun Lu1 and Yao-Huei Huang2
1 Department of Information Management College of Management Fu Jen Catholic University No510 Jhongjheng RoadSinjhuang City Taipei County 242 Taiwan
2 Institute of Information Management National Chiao Tung University Management Building 2 1001 Ta-Hsueh RoadHsinchu 300 Taiwan
Correspondence should be addressed to Yao-Huei Huang yaohueihuanggmailcom
Received 31 January 2013 Accepted 2 June 2013
Academic Editor Irem Ozkarahan
Copyright copy 2013 H-C Lu and Y-H Huang This is an open access article distributed under the Creative Commons AttributionLicense which permits unrestricted use distribution and reproduction in any medium provided the original work is properlycited
Owing to the transparency in supply chains enhancing competitiveness of industries becomes a vital factor Therefore manydeveloping countries look for a possible method to save costs In this point of view this study deals with the complicatedliberalization policies in the global supply chain management system and proposes a mathematical model via the flow-controlconstraints which are utilized to cope with the bonded warehouses for obtainingmaximal profits Numerical experiments illustratethat the proposed model can be effectively solved to obtain the optimal profits in the global supply chain environment
1 Introduction
Traditionally supply chainmanagement (SCM)mainly offersdifferent ways to reduce the production and transportationcosts such that either the total expenditures in a supply chaincan beminimized [1 2] or the profits can bemaximized [3 4]to enhance the industrial competitiveness These conceptsabove have been formed as SCMmathematical models in thelast few decades such as supplierrsquos pricing policy in a just-in-time environment [5] pricing strategy for deterioratingitems using quantity discount when customer demand issensitive [6] and an optimization approach for supply chainmanagement models with quantity discount policy [7]
On the other hand a part of studies is focused ondemand forecasting [8ndash11] to decrease the impact of thebullwhip effect [12 13] Additionally some studies utilize theneural network method and regression analysis to improvethe accuracy for forecasting customer demand [14ndash16] andfurthermore these connection weights in neural networksare assigned weighting based on fuzzy analytic hierarchyprocessmethods without any tunings [14 17] By the previousmentions we cannot guarantee that the solution are optimal
Based on the reason this study proposes a deterministicmethod an approximate method for linearizing nonlineartime series analysis model to forecast customer demand inSection 32
Many researchers have suggested that information shar-ing is a key influence on SCM environments [11 18] andthat it impacts the SCM performance in terms of both totalcosts and service levels [11 19 20] However the developmentof a global SCM model must share information as muchas possible We then suppose that the information in ourexperimental tests is shared to simplify the SCM situations[21ndash23]
In order to enhance the competitiveness of industriesa liberalization policy discussed in recent years becomes animportant factor Many developing countries have imple-mented a liberalization policy with bonded warehouses inthe global supply chain environments The liberalizationpolicy with bonded warehouses in the different countriesaround the world makes the goods be stored in the bondedwarehouse the liability of exporter is temporally cancelledand the importer and warehouse proprietor incur liability A
2 Journal of Optimization
Start
Solve a global SCM model
BOM table Demand forecasting
Visualize results(global SCM system)
End
Decide the number of nodes(upstream midstream and downstream)
Figure 1 A flow chart of the proposed procedure
Vendor Facility Warehouse Retailer
1
2
3
f1
f2
w1
w2
r1
r2
r3
Figure 2 Schema of a global SCM
bonded warehouse is one building or another secured areawhere dutiable goods may be stored or processed withoutpayment of duty It may be managed by the state or bya private enterprise The liberalization policy with bondedwarehouses not only enhances the industries competitivenessbut also saves inventory production and transportation costsOf course the objective is to find more bonded warehousesand more costs can be saved In this study the policy hasproved the advantage for the exporter obtaining more profitin our numerical examples [24ndash28]
A global SCM is seen as a network that includesupstreammidstream and downstream sectors linkage wherewe consider vendors as upstream facilities and warehousesas midstream and retailers (or customers) as downstreamThe liberalization policy focuses on bonded warehouses ofmidstream in different countries around the world is notconsidered in the current SCM model [7 29] In this studywe then propose a global SCM model to be suitable forthe international liberalization policy The objective is tomaximize the profits associated with inventory productiontranspiration and distribution in the period of times The
global SCM model is formed as a linear mixed-integerprogram and solved by commerce software (ie [30])Then aflow chart for the proposed procedure is depicted in Figure 1
This paper is organized as follows Section 2 definesthe notations in global SCM and forms a basic model ofglobal SCM Section 3 describes a procedure of global SCMSection 4 shows the system architecture of a global SCMFinally numerical examples demonstrate that the proposedglobal SCMmethod can enhance profit ratio in Section 5
2 A Global SCM Model
There are four stages in the global SCM environment dis-cussed the vendor facility warehouse and retailer Eachstage may be located in different nations around the worldThe general structure of a global supply chain network hasbeen displayed in Figure 2 For simplifying presentation bothincome and cost statements occur in the dashed rectangle asfollows
(i) Income statement
(a) sales of goods in warehouse(b) transfer price of goods in facility
(ii) Cost statement
(a) procurement cost from vendor(b) transportation cost (ie vendor to facility facil-
ity to warehouse and warehouse to retailer)(c) inventory cost (ie warehouse)
Notations are described in Section 21 and a basic modelof global SCM is formulated in Section 22
21 Notations There are seven entity sets
119873 The set of nations 119899
119881 The set of vendors 119907
119865 The set of facilities 119891
119882 The set of warehouses 119908
119877 The set of retailers 119903
119879 The set of times 119905
119875 The set of parts (or goods) 119901
for presenting each entity associated with notations as shownabove
All parameters are composite style which are composedof uppercase English strings and suffixes with one or morelowercase alphabet characters and each suffix single lower-case alphabet character presents the element of relative entitysets These parameters are
119875119877119868119862119864119908119901 The sales price of part 119901 in warehouse 119908
119879119875119877119868119862119864119891119901 The transfer price of part 119901 in facility 119891
119875119875119877119868119862119864V119901 The procurement cost of part 119901 fromvendor V
Journal of Optimization 3
119872119862119874119878119879119891119901The production cost of part119901 in facility119891
119879119862119874119878119879V119891 The basis of transportation costs fromvendor V to facility 119891119879119862119874119878119879
1198911198911015840 The basis of transportation costs from
facility 119891 to facility 1198911015840
119879119862119874119878119879119891119908 The basis of transportation costs from
facility 119891 to warehouse 119908119879119862119874119878119879
119908119903 The basis of transportation costs from
warehouse 119908 to retailer 119903119868119862119874119878119879
119891 The basis of inventory costs in facility 119891
119868119862119874119878119879119908The basis of inventory costs inwarehouse119908
119879V119891 The transportation time from vendor V to facility1198911198791198911198911015840 The transportation time from facility119891 to facility
1198911015840
119879119891119908 The transportation time from facility 119891 to ware-
house 119908119879119908119903 The transportation time from warehouse 119908 to
retailer 119903119879119887119900119898
119891119901 The production time of part 119901 in facility 119891
1198611198741198721199011015840119901 The amount for part 119901 reproducing as part
1199011015840
119875119879119901Theweighting of transportation costs for part 119901
119875119868119901 The weighting of inventory costs for part 119901
119863119905119903119901 The required quantities of part 119901 for retailer 119903 at
time 119905119879119860119883119899 The tax in nation 119899
119863119880119879119884119899119901 The import tax of part 119901 in nation 119899
119871119874119862119899V The vendor 119907 in nation 119899
119871119874119862119899119891 The facility 119891 in nation 119899
119871119874119862119899119908 The warehouse 119908 in nation 119899
119871119874119862119899119903 The retailer 119903 in nation 119899
119872 119880119891119901 The supplied upper level of part 119901 in the
facility 119891119877 119880V119891119901 The supplied upper level of part 119901 fromvendor V to facility 119891119877 1198801198911198911015840119901 The supplied upper level of part 119901 from
facility 119891 to facility 1198911015840
119877 119880119891119908119901
The supplied upper level of part 119901 fromfacility 119891 to warehouse 119908119877 119880119908119903119901
The supplied upper level of part 119901 fromwarehouse 119908 to retailer 119903119868 119880119891119901The inventoried upper level of part 119901 in facility
119891119868 119880119908119901 The inventoried upper level of part 119901 in
warehouse 119908
All decision variables in global SCM are also compos-itestyle with lowercase suffix alphabet characters The detailsof decision variables (integer variables) are described below
119877119905V119891119901 The amount of part 119901 transported from vendor
V to facility 119891 at time 119905
119872119905119891119901 The amount of part 119901 produced in facility 119891 at
time 119905
1198771199051198911198911015840119901 The amount of part 119901 transported from facility
119891 to facility 1198911015840 at time 119905
119877119905119891119908119901
The amount of part 119901 transported from facility119891 to warehouse 119908 at time 119905
119877119905119908119903119901
The amount of part 119901 transported from ware-house 119908 to retailer 119903 at time 119905
119868119905119891119901 The inventory of part 119901 in facility 119891 at time 119905
119868119905119908119901
The inventory of part 119901 in warehouse 119908 at time 119905
119877119861119905V119891119901 The amount of bonded part 119901 transported
from vendor V to facility 119891 at time 119905
119872119861119905119891119901 The amount of bonded part 119901 produced in
facility 119891 at time 119905
1198771198611199051198911198911015840119901 The amount of bonded part 119901 transported
from facility 119891 to facility 1198911015840 at time 119905
119877119861119905119891119908119901
The amount of bonded part 119901 transportedfrom facility 119891 to warehouse 119908 at time 119905
119868119861119905119891119901 The inventory of bonded part 119901 in facility 119891 at
time 119905
22 A Proposed Model We separately use 119894119887119905+
119905119899 119894119887119905minus
119905119899 and
119879119860119883119899as the symbols of sales profits losses and taxes in each
nation at different timesThe objective of the proposedmodelis to maximize the sales profits associated with inventoryproduction transpiration and distribution in each nation ata period of timesThe linear global SCMmodel is formulatedas followsA Global SCMModel
Maximize sum
119905isin119879 119899isin119873
((1 minus 119879119860119883119899) 119894119887119905+
119905119899minus 119894119887119905minus
119905119899) (1)
subject to
119894119887119905+
119905119899minus 119894119887119905minus
119905119899
= sum
119901
( sum
119908isin119882 119903isin119877 119901isin119875
(119877119905119908119903119901
lowast
(119875119877119868119862119864119908119901
minus 119875119879119901
lowast 119879119862119874119878119879119908119903
))
(2)
4 Journal of Optimization
minus sum
119891isin119865119908isin119882 119901isin119875
(119877119905119891119908119901
lowast (119879119875119877119868119862119864119891119901
+ 119875119879119901
lowast 119879119862119874119878119879119891119908
))
(3)
minus sum
119891isin119865119908isin119882119901isin119875
((119877119905119891119908119901
minus 119877119861119905119891119908119901
)
lowast 119879119875119877119868119862119864119891119901
lowast 119863119880119879119884119899119901
)
(4)
minus sum
119908isin119882119901isin119875
(119868119905119908119901
lowast 119875119868119901
lowast 119868119862119874119878119879119908
) (5)
minus sum
119908isin119882
(119865119862119874119878119879119908
) (6)
+ sum
119891isin119865119908isin119882119901isin119875
(119877119905119891119908119901
lowast 119879119875119877119868119862119864119891119901
) (7)
+ sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911198911015840119901
lowast 119879119875119877119868119862119864119891119901
) (8)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911015840119891119901
lowast (1198791198751198771198681198621198641198911015840119901
+119875119879119901
lowast 1198791198621198741198781198791198911015840119891))
(9)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
((1198771199051198911015840119891119901
minus 1198771198611199051198911015840119891119901
)
lowast1198791198751198771198681198621198641198911015840119901
lowast 119863119880119879119884119899119901
)
(10)
minus sum
Visin119881119891isin119865119901isin119875
(119877119905V119891119901
lowast (119875119875119877119868119862119864V119901 + 119875119879119901
lowast 119879119862119874119878119879V119891))
(11)
minus sum
Visin119881119891isin119865119901isin119875
((119877119905V119891119901 minus 119877119861
119905V119891119901)
lowast119875119875119877119868119862119864V119901 lowast 119863119880119879119884119899119901
)
(12)
minus sum
119891isin119865119901isin119875
(119872119905119891119901
lowast 119872119862119874119878119879119891119901
) (13)
minus sum
119891isin119865119901isin119875
(119868119905119891119901
lowast PI119901
lowast 119868119862119874119878119879119891) (14)
minus sum
119891isin119865119901isin119875
(119865119862119874119878119879119891)) for 119905 isin 119879 119899 isin 119873 (15)
where all decision variables (ie 119877119905V119891119901 119872119905119891119901 etc) belong to
integersThe objective is to maximize the profits (ie expression
(1)) in the global SCMmodelThe revenue of sales (or losses)are obtained from the following statements
Income Statement
(2) sales of part 119901 in warehouse 119908 minus transporta-tion costs from warehouse 119908 to retailer 119903
(7) transfer price of part 119901 from facility 119891 towarehouses 119908 (ie transfer price)
(8) transfer price of part 119901 from facility 119891 to facility1198911015840 (ie transfer price)
Cost Statement
(3) transportation and ordering costs from facility 119891
to warehouse 119908
(4) import duty of part 119901 from facility 119891 to ware-house 119908
(5) inventory costs of part 119901 in warehouse 119908
(6) fixed cost in warehouse 119908
(9) transportation and ordering costs from facility 119891
to warehouse 119908
(10) import duty of part 119901 from facility 119891 tofacility 119891
1015840
(11) transportation and ordering costs from vendor Vto facility 119891
(12) import duty of parts from vendor V to facility
(13) production cost in facility 119891
(14) inventory cost in warehouse 119908
(15) fixed costs in facilities
Continuously there are two kinds of constraints in theproposed model One is flow conservation and the other isupper-lower bound constraints which are described belowFlow Conservation
We have
119868119905119891119901
+ sum
Visin119881
119877(119905minus119879V119891)V119891119901
+ sum
1198911015840isin119865 1198911015840= 119891
119877(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872(119905minus119879119887119900119898
119891119901)119891119901
minus sum
1199011015840isin119875 119901 = 119901
1015840
BOM1199011015840119901
lowast 1198721199051198911199011015840 minus sum
1198911015840isin1198651198911015840= 119891
1198771199051198911198911015840119901
minus sum
119908isin119882
119877119905119891119908119901
= 119868(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(16)
Journal of Optimization 5
119868119905119908119901
+ sum
119891isin119865
119877(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(17)
119868119861119905119891119901
+ sum
Visin119881
119877119861(119905minus119879V119891)V119891119901
+ sum
1198911015840isin1198651198911015840= 119891
119877119861(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872119861(119905minus119879119887119900119898
119891119901)119891119901 minus sum
1199011015840isin1198751199011015840= 119901
BOM1199011015840119901
lowast 1198721198611199051198911199011015840
minus sum
1198911015840
1198771198611199051198911198911015840119901
minus sum
119908
119877119861119905119891119908119901
= 119868119861(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(18)
119868119861119905119908119901
+ sum
119891isin119865
119877119861(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868119861(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(19)
sum
119908isin119882
119877(119905minus119879119908119903)119908119903119901
= 119863119905119903119901
forall119905 isin 119879 119903 isin 119877 119901 isin 119875 (20)
These flow conservation constraints are described as follows
(16) the limitation of the flow conservation in eachfacility(17) the limitation of the flow conservation in eachwarehouse(18) the limited bonded parts of the flow conservationin each facility(19) the limited bonded parts of the flow conservationin each warehouse(20) all of the supplied goods satisfy with retailerdemand
Upper-Lower BoundWe have
119872119905119891119901
le 119872 119880119891119901
(21)
119868119905119891119901
le 119868 119880119891119901
(22)
119868119905119908119901
le 119868 119880119908119901
(23)
119877119905V119891119901 le 119877 119880V119891119901 (24)
1198771199051198911198911015840119901
le 119877 1198801198911198911015840119901 (25)
119877119905119891119908119901
le 119877 119880119891119908119901
(26)
119877119905119908119903119901
le 119877 119880119908119903119901
(27)
119877119861119905V119891119901 le 119877
119905V119891119901 (28)
1198771198611199051198911198911015840119901
le 1198771199051198911198911015840119901 (29)
119877119861119905119891119908119901
le 119877119905119891119908119901
(30)
for 119905 isin 119879 V isin 119881 119891 1198911015840
isin 119865 and 119891 = 1198911015840 119901 isin 119875 119908 isin 119882 and
119903 isin 119877
Table 1 Profit ratio
Items Objective Profit ratioHaving bondedwarehouse (Hb) $603010 146uarr ((Hb minus Wb) Hb)
Without bondedwarehouse (Wb) $514680
Table 2 Vendor location
119871119874119862V V1
V2
V3
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 3 Facility location
119871119874119862119891
1198911
1198912
1198913
1198914
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 4 Warehouse location
119871119874119862119908
1199081
1199082
1199083
1199084
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 5 Retailer location
119871119874119862119903
1199031
1199032
1199033
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 6 The weighting of transportation costs of parts
119875119879119901
1199011
1199012
1199013
1199014
1199015
Weighting 1 02 08 01 05
The upper-lower bound constraints are noted as follows
(21) capacities in which facilities produce goods
(22) inventory of parts in facilities
(23) inventory of parts in warehouses
(24) quantities of raw parts transported from vendorsto facilities
(25) quantities of parts transported from facilities tofacilities
(26) quantities of parts transported from facilities towarehouses
(27) quantities of parts transported from the ware-house to retailers
(28) quantities of bonded parts transported fromvendors to facilities
(29) quantities of bonded parts transported fromfacilities to other facilities
(30) quantities of bonded parts transported fromfacilities to warehouses
6 Journal of Optimization
Table 7 The weighting of inventory costs of parts
119875119868119901
1199011
1199012
1199013
1199014
1199015
Weighting 05 01 05 01 04
Table 8 The duty of parts in different nations
119863119880119879119884119899119901
1199011
1199012
1199013
1199014
1199015
1198991
02 03 02 001 0051198992
03 002 03 001 011198993
01 001 01 005 003
Table 9 The tax in different nations
119879119886119909119899
1198991
1198992
1198993
007 003 008
Table 10 Sales price of each part for each vendor
119875119875119877119868119862119864V119901 1199011
1199012
1199013
1199014
1199015
V1
28V2
40V3
40 30All blank cells are disabled
Table 11 Maximum supplied limitation in each vendor
119877 119880V119891119901 1198911
1198912
1198913
1198914
V1
0 1199014
= 1000 0 0V2
0 0 1199015
= 500 1199015
= 500
V3
1199012
= 750 1199014
= 1500 0 1199013
= 1500 1199012
= 700
All blank cells are disabled
Table 12 Production costs and limitations for each facility
119872119862119874119878119879119891119901119872 119880
1198911199011199011
1199012
1199013
1199014
1199015
1198911
204001198912
303501198913
283001198914
30450All blank cells are disabled
Table 13 Transportation costs and lead time from each vendor toeach facility
119879119862119874119878119879V119891119879V119891 1198911
1198912
1198913
1198914
V1
31V2
11 11V3
42 31 21
3 A Procedure of Global SCM
There are different procedures in a global supply chain envi-ronment such as optimal transportation in logistic manage-ment demand forecasting in preprocessing bill of materialsrsquo(BOM) table and considering the liberalization policies withbonded warehouses These procedures are discussed below
Table 14 Amount of part 119901 needed for producing part 1199011015840
119861119874119872 1199011015840
11199011015840
21199011015840
31199011015840
41199011015840
5
1199011
0 2 1 0 01199012
0 0 0 0 01199013
0 0 0 1 11199014
0 0 0 0 01199015
0 0 0 0 0
Table 15The lead time of the facility for producing part1199011015840 and sales
price in the facility
119879119887119900119898119891119901
119879119875119877119868119862119864119891119901
1199011
1199012
1199013
1199014
1199015
1198911
12501198912
11501198913
11501198914
1260All blank cells are disabled
Table 16 The base of inventory costs
119868119862119874119878119879119891
1198911
1198912
1198913
1198914
6 2 1 12
Table 17 Maximum stock level in each facility
119868 119880119891119901
1199011
1199012
1199013
1199014
1199015
1198911
200 400 200 0 01198912
0 0 300 300 3001198913
0 0 400 400 4001198914
100 200 100 0 0
Table 18 Transportation costs and lead time from one facility toanother facility
11987911986211987411987811987911989111989110158401198791198911198911015840 119891
11198912
1198913
1198914
1198911
1198912
221198913
321198914
All blank cells are disabled
Table 19 Maximum transferable quantity from one facility toanother facility
119877 1198801198911198911015840119901
1198911
1198912
1198913
1198914
1198911
0 0 0 01198912
1199013
= 1000 0 0 01198913
0 0 0 1199013
= 1000
1198914
0 0 0 0
31 Logistic Management In this study we assume thata global SCM goes through four stages such as procure-ment production warehousing and distribution (ie 119879V119891 +
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
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Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
2 Journal of Optimization
Start
Solve a global SCM model
BOM table Demand forecasting
Visualize results(global SCM system)
End
Decide the number of nodes(upstream midstream and downstream)
Figure 1 A flow chart of the proposed procedure
Vendor Facility Warehouse Retailer
1
2
3
f1
f2
w1
w2
r1
r2
r3
Figure 2 Schema of a global SCM
bonded warehouse is one building or another secured areawhere dutiable goods may be stored or processed withoutpayment of duty It may be managed by the state or bya private enterprise The liberalization policy with bondedwarehouses not only enhances the industries competitivenessbut also saves inventory production and transportation costsOf course the objective is to find more bonded warehousesand more costs can be saved In this study the policy hasproved the advantage for the exporter obtaining more profitin our numerical examples [24ndash28]
A global SCM is seen as a network that includesupstreammidstream and downstream sectors linkage wherewe consider vendors as upstream facilities and warehousesas midstream and retailers (or customers) as downstreamThe liberalization policy focuses on bonded warehouses ofmidstream in different countries around the world is notconsidered in the current SCM model [7 29] In this studywe then propose a global SCM model to be suitable forthe international liberalization policy The objective is tomaximize the profits associated with inventory productiontranspiration and distribution in the period of times The
global SCM model is formed as a linear mixed-integerprogram and solved by commerce software (ie [30])Then aflow chart for the proposed procedure is depicted in Figure 1
This paper is organized as follows Section 2 definesthe notations in global SCM and forms a basic model ofglobal SCM Section 3 describes a procedure of global SCMSection 4 shows the system architecture of a global SCMFinally numerical examples demonstrate that the proposedglobal SCMmethod can enhance profit ratio in Section 5
2 A Global SCM Model
There are four stages in the global SCM environment dis-cussed the vendor facility warehouse and retailer Eachstage may be located in different nations around the worldThe general structure of a global supply chain network hasbeen displayed in Figure 2 For simplifying presentation bothincome and cost statements occur in the dashed rectangle asfollows
(i) Income statement
(a) sales of goods in warehouse(b) transfer price of goods in facility
(ii) Cost statement
(a) procurement cost from vendor(b) transportation cost (ie vendor to facility facil-
ity to warehouse and warehouse to retailer)(c) inventory cost (ie warehouse)
Notations are described in Section 21 and a basic modelof global SCM is formulated in Section 22
21 Notations There are seven entity sets
119873 The set of nations 119899
119881 The set of vendors 119907
119865 The set of facilities 119891
119882 The set of warehouses 119908
119877 The set of retailers 119903
119879 The set of times 119905
119875 The set of parts (or goods) 119901
for presenting each entity associated with notations as shownabove
All parameters are composite style which are composedof uppercase English strings and suffixes with one or morelowercase alphabet characters and each suffix single lower-case alphabet character presents the element of relative entitysets These parameters are
119875119877119868119862119864119908119901 The sales price of part 119901 in warehouse 119908
119879119875119877119868119862119864119891119901 The transfer price of part 119901 in facility 119891
119875119875119877119868119862119864V119901 The procurement cost of part 119901 fromvendor V
Journal of Optimization 3
119872119862119874119878119879119891119901The production cost of part119901 in facility119891
119879119862119874119878119879V119891 The basis of transportation costs fromvendor V to facility 119891119879119862119874119878119879
1198911198911015840 The basis of transportation costs from
facility 119891 to facility 1198911015840
119879119862119874119878119879119891119908 The basis of transportation costs from
facility 119891 to warehouse 119908119879119862119874119878119879
119908119903 The basis of transportation costs from
warehouse 119908 to retailer 119903119868119862119874119878119879
119891 The basis of inventory costs in facility 119891
119868119862119874119878119879119908The basis of inventory costs inwarehouse119908
119879V119891 The transportation time from vendor V to facility1198911198791198911198911015840 The transportation time from facility119891 to facility
1198911015840
119879119891119908 The transportation time from facility 119891 to ware-
house 119908119879119908119903 The transportation time from warehouse 119908 to
retailer 119903119879119887119900119898
119891119901 The production time of part 119901 in facility 119891
1198611198741198721199011015840119901 The amount for part 119901 reproducing as part
1199011015840
119875119879119901Theweighting of transportation costs for part 119901
119875119868119901 The weighting of inventory costs for part 119901
119863119905119903119901 The required quantities of part 119901 for retailer 119903 at
time 119905119879119860119883119899 The tax in nation 119899
119863119880119879119884119899119901 The import tax of part 119901 in nation 119899
119871119874119862119899V The vendor 119907 in nation 119899
119871119874119862119899119891 The facility 119891 in nation 119899
119871119874119862119899119908 The warehouse 119908 in nation 119899
119871119874119862119899119903 The retailer 119903 in nation 119899
119872 119880119891119901 The supplied upper level of part 119901 in the
facility 119891119877 119880V119891119901 The supplied upper level of part 119901 fromvendor V to facility 119891119877 1198801198911198911015840119901 The supplied upper level of part 119901 from
facility 119891 to facility 1198911015840
119877 119880119891119908119901
The supplied upper level of part 119901 fromfacility 119891 to warehouse 119908119877 119880119908119903119901
The supplied upper level of part 119901 fromwarehouse 119908 to retailer 119903119868 119880119891119901The inventoried upper level of part 119901 in facility
119891119868 119880119908119901 The inventoried upper level of part 119901 in
warehouse 119908
All decision variables in global SCM are also compos-itestyle with lowercase suffix alphabet characters The detailsof decision variables (integer variables) are described below
119877119905V119891119901 The amount of part 119901 transported from vendor
V to facility 119891 at time 119905
119872119905119891119901 The amount of part 119901 produced in facility 119891 at
time 119905
1198771199051198911198911015840119901 The amount of part 119901 transported from facility
119891 to facility 1198911015840 at time 119905
119877119905119891119908119901
The amount of part 119901 transported from facility119891 to warehouse 119908 at time 119905
119877119905119908119903119901
The amount of part 119901 transported from ware-house 119908 to retailer 119903 at time 119905
119868119905119891119901 The inventory of part 119901 in facility 119891 at time 119905
119868119905119908119901
The inventory of part 119901 in warehouse 119908 at time 119905
119877119861119905V119891119901 The amount of bonded part 119901 transported
from vendor V to facility 119891 at time 119905
119872119861119905119891119901 The amount of bonded part 119901 produced in
facility 119891 at time 119905
1198771198611199051198911198911015840119901 The amount of bonded part 119901 transported
from facility 119891 to facility 1198911015840 at time 119905
119877119861119905119891119908119901
The amount of bonded part 119901 transportedfrom facility 119891 to warehouse 119908 at time 119905
119868119861119905119891119901 The inventory of bonded part 119901 in facility 119891 at
time 119905
22 A Proposed Model We separately use 119894119887119905+
119905119899 119894119887119905minus
119905119899 and
119879119860119883119899as the symbols of sales profits losses and taxes in each
nation at different timesThe objective of the proposedmodelis to maximize the sales profits associated with inventoryproduction transpiration and distribution in each nation ata period of timesThe linear global SCMmodel is formulatedas followsA Global SCMModel
Maximize sum
119905isin119879 119899isin119873
((1 minus 119879119860119883119899) 119894119887119905+
119905119899minus 119894119887119905minus
119905119899) (1)
subject to
119894119887119905+
119905119899minus 119894119887119905minus
119905119899
= sum
119901
( sum
119908isin119882 119903isin119877 119901isin119875
(119877119905119908119903119901
lowast
(119875119877119868119862119864119908119901
minus 119875119879119901
lowast 119879119862119874119878119879119908119903
))
(2)
4 Journal of Optimization
minus sum
119891isin119865119908isin119882 119901isin119875
(119877119905119891119908119901
lowast (119879119875119877119868119862119864119891119901
+ 119875119879119901
lowast 119879119862119874119878119879119891119908
))
(3)
minus sum
119891isin119865119908isin119882119901isin119875
((119877119905119891119908119901
minus 119877119861119905119891119908119901
)
lowast 119879119875119877119868119862119864119891119901
lowast 119863119880119879119884119899119901
)
(4)
minus sum
119908isin119882119901isin119875
(119868119905119908119901
lowast 119875119868119901
lowast 119868119862119874119878119879119908
) (5)
minus sum
119908isin119882
(119865119862119874119878119879119908
) (6)
+ sum
119891isin119865119908isin119882119901isin119875
(119877119905119891119908119901
lowast 119879119875119877119868119862119864119891119901
) (7)
+ sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911198911015840119901
lowast 119879119875119877119868119862119864119891119901
) (8)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911015840119891119901
lowast (1198791198751198771198681198621198641198911015840119901
+119875119879119901
lowast 1198791198621198741198781198791198911015840119891))
(9)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
((1198771199051198911015840119891119901
minus 1198771198611199051198911015840119891119901
)
lowast1198791198751198771198681198621198641198911015840119901
lowast 119863119880119879119884119899119901
)
(10)
minus sum
Visin119881119891isin119865119901isin119875
(119877119905V119891119901
lowast (119875119875119877119868119862119864V119901 + 119875119879119901
lowast 119879119862119874119878119879V119891))
(11)
minus sum
Visin119881119891isin119865119901isin119875
((119877119905V119891119901 minus 119877119861
119905V119891119901)
lowast119875119875119877119868119862119864V119901 lowast 119863119880119879119884119899119901
)
(12)
minus sum
119891isin119865119901isin119875
(119872119905119891119901
lowast 119872119862119874119878119879119891119901
) (13)
minus sum
119891isin119865119901isin119875
(119868119905119891119901
lowast PI119901
lowast 119868119862119874119878119879119891) (14)
minus sum
119891isin119865119901isin119875
(119865119862119874119878119879119891)) for 119905 isin 119879 119899 isin 119873 (15)
where all decision variables (ie 119877119905V119891119901 119872119905119891119901 etc) belong to
integersThe objective is to maximize the profits (ie expression
(1)) in the global SCMmodelThe revenue of sales (or losses)are obtained from the following statements
Income Statement
(2) sales of part 119901 in warehouse 119908 minus transporta-tion costs from warehouse 119908 to retailer 119903
(7) transfer price of part 119901 from facility 119891 towarehouses 119908 (ie transfer price)
(8) transfer price of part 119901 from facility 119891 to facility1198911015840 (ie transfer price)
Cost Statement
(3) transportation and ordering costs from facility 119891
to warehouse 119908
(4) import duty of part 119901 from facility 119891 to ware-house 119908
(5) inventory costs of part 119901 in warehouse 119908
(6) fixed cost in warehouse 119908
(9) transportation and ordering costs from facility 119891
to warehouse 119908
(10) import duty of part 119901 from facility 119891 tofacility 119891
1015840
(11) transportation and ordering costs from vendor Vto facility 119891
(12) import duty of parts from vendor V to facility
(13) production cost in facility 119891
(14) inventory cost in warehouse 119908
(15) fixed costs in facilities
Continuously there are two kinds of constraints in theproposed model One is flow conservation and the other isupper-lower bound constraints which are described belowFlow Conservation
We have
119868119905119891119901
+ sum
Visin119881
119877(119905minus119879V119891)V119891119901
+ sum
1198911015840isin119865 1198911015840= 119891
119877(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872(119905minus119879119887119900119898
119891119901)119891119901
minus sum
1199011015840isin119875 119901 = 119901
1015840
BOM1199011015840119901
lowast 1198721199051198911199011015840 minus sum
1198911015840isin1198651198911015840= 119891
1198771199051198911198911015840119901
minus sum
119908isin119882
119877119905119891119908119901
= 119868(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(16)
Journal of Optimization 5
119868119905119908119901
+ sum
119891isin119865
119877(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(17)
119868119861119905119891119901
+ sum
Visin119881
119877119861(119905minus119879V119891)V119891119901
+ sum
1198911015840isin1198651198911015840= 119891
119877119861(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872119861(119905minus119879119887119900119898
119891119901)119891119901 minus sum
1199011015840isin1198751199011015840= 119901
BOM1199011015840119901
lowast 1198721198611199051198911199011015840
minus sum
1198911015840
1198771198611199051198911198911015840119901
minus sum
119908
119877119861119905119891119908119901
= 119868119861(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(18)
119868119861119905119908119901
+ sum
119891isin119865
119877119861(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868119861(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(19)
sum
119908isin119882
119877(119905minus119879119908119903)119908119903119901
= 119863119905119903119901
forall119905 isin 119879 119903 isin 119877 119901 isin 119875 (20)
These flow conservation constraints are described as follows
(16) the limitation of the flow conservation in eachfacility(17) the limitation of the flow conservation in eachwarehouse(18) the limited bonded parts of the flow conservationin each facility(19) the limited bonded parts of the flow conservationin each warehouse(20) all of the supplied goods satisfy with retailerdemand
Upper-Lower BoundWe have
119872119905119891119901
le 119872 119880119891119901
(21)
119868119905119891119901
le 119868 119880119891119901
(22)
119868119905119908119901
le 119868 119880119908119901
(23)
119877119905V119891119901 le 119877 119880V119891119901 (24)
1198771199051198911198911015840119901
le 119877 1198801198911198911015840119901 (25)
119877119905119891119908119901
le 119877 119880119891119908119901
(26)
119877119905119908119903119901
le 119877 119880119908119903119901
(27)
119877119861119905V119891119901 le 119877
119905V119891119901 (28)
1198771198611199051198911198911015840119901
le 1198771199051198911198911015840119901 (29)
119877119861119905119891119908119901
le 119877119905119891119908119901
(30)
for 119905 isin 119879 V isin 119881 119891 1198911015840
isin 119865 and 119891 = 1198911015840 119901 isin 119875 119908 isin 119882 and
119903 isin 119877
Table 1 Profit ratio
Items Objective Profit ratioHaving bondedwarehouse (Hb) $603010 146uarr ((Hb minus Wb) Hb)
Without bondedwarehouse (Wb) $514680
Table 2 Vendor location
119871119874119862V V1
V2
V3
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 3 Facility location
119871119874119862119891
1198911
1198912
1198913
1198914
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 4 Warehouse location
119871119874119862119908
1199081
1199082
1199083
1199084
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 5 Retailer location
119871119874119862119903
1199031
1199032
1199033
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 6 The weighting of transportation costs of parts
119875119879119901
1199011
1199012
1199013
1199014
1199015
Weighting 1 02 08 01 05
The upper-lower bound constraints are noted as follows
(21) capacities in which facilities produce goods
(22) inventory of parts in facilities
(23) inventory of parts in warehouses
(24) quantities of raw parts transported from vendorsto facilities
(25) quantities of parts transported from facilities tofacilities
(26) quantities of parts transported from facilities towarehouses
(27) quantities of parts transported from the ware-house to retailers
(28) quantities of bonded parts transported fromvendors to facilities
(29) quantities of bonded parts transported fromfacilities to other facilities
(30) quantities of bonded parts transported fromfacilities to warehouses
6 Journal of Optimization
Table 7 The weighting of inventory costs of parts
119875119868119901
1199011
1199012
1199013
1199014
1199015
Weighting 05 01 05 01 04
Table 8 The duty of parts in different nations
119863119880119879119884119899119901
1199011
1199012
1199013
1199014
1199015
1198991
02 03 02 001 0051198992
03 002 03 001 011198993
01 001 01 005 003
Table 9 The tax in different nations
119879119886119909119899
1198991
1198992
1198993
007 003 008
Table 10 Sales price of each part for each vendor
119875119875119877119868119862119864V119901 1199011
1199012
1199013
1199014
1199015
V1
28V2
40V3
40 30All blank cells are disabled
Table 11 Maximum supplied limitation in each vendor
119877 119880V119891119901 1198911
1198912
1198913
1198914
V1
0 1199014
= 1000 0 0V2
0 0 1199015
= 500 1199015
= 500
V3
1199012
= 750 1199014
= 1500 0 1199013
= 1500 1199012
= 700
All blank cells are disabled
Table 12 Production costs and limitations for each facility
119872119862119874119878119879119891119901119872 119880
1198911199011199011
1199012
1199013
1199014
1199015
1198911
204001198912
303501198913
283001198914
30450All blank cells are disabled
Table 13 Transportation costs and lead time from each vendor toeach facility
119879119862119874119878119879V119891119879V119891 1198911
1198912
1198913
1198914
V1
31V2
11 11V3
42 31 21
3 A Procedure of Global SCM
There are different procedures in a global supply chain envi-ronment such as optimal transportation in logistic manage-ment demand forecasting in preprocessing bill of materialsrsquo(BOM) table and considering the liberalization policies withbonded warehouses These procedures are discussed below
Table 14 Amount of part 119901 needed for producing part 1199011015840
119861119874119872 1199011015840
11199011015840
21199011015840
31199011015840
41199011015840
5
1199011
0 2 1 0 01199012
0 0 0 0 01199013
0 0 0 1 11199014
0 0 0 0 01199015
0 0 0 0 0
Table 15The lead time of the facility for producing part1199011015840 and sales
price in the facility
119879119887119900119898119891119901
119879119875119877119868119862119864119891119901
1199011
1199012
1199013
1199014
1199015
1198911
12501198912
11501198913
11501198914
1260All blank cells are disabled
Table 16 The base of inventory costs
119868119862119874119878119879119891
1198911
1198912
1198913
1198914
6 2 1 12
Table 17 Maximum stock level in each facility
119868 119880119891119901
1199011
1199012
1199013
1199014
1199015
1198911
200 400 200 0 01198912
0 0 300 300 3001198913
0 0 400 400 4001198914
100 200 100 0 0
Table 18 Transportation costs and lead time from one facility toanother facility
11987911986211987411987811987911989111989110158401198791198911198911015840 119891
11198912
1198913
1198914
1198911
1198912
221198913
321198914
All blank cells are disabled
Table 19 Maximum transferable quantity from one facility toanother facility
119877 1198801198911198911015840119901
1198911
1198912
1198913
1198914
1198911
0 0 0 01198912
1199013
= 1000 0 0 01198913
0 0 0 1199013
= 1000
1198914
0 0 0 0
31 Logistic Management In this study we assume thata global SCM goes through four stages such as procure-ment production warehousing and distribution (ie 119879V119891 +
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Journal of Optimization 3
119872119862119874119878119879119891119901The production cost of part119901 in facility119891
119879119862119874119878119879V119891 The basis of transportation costs fromvendor V to facility 119891119879119862119874119878119879
1198911198911015840 The basis of transportation costs from
facility 119891 to facility 1198911015840
119879119862119874119878119879119891119908 The basis of transportation costs from
facility 119891 to warehouse 119908119879119862119874119878119879
119908119903 The basis of transportation costs from
warehouse 119908 to retailer 119903119868119862119874119878119879
119891 The basis of inventory costs in facility 119891
119868119862119874119878119879119908The basis of inventory costs inwarehouse119908
119879V119891 The transportation time from vendor V to facility1198911198791198911198911015840 The transportation time from facility119891 to facility
1198911015840
119879119891119908 The transportation time from facility 119891 to ware-
house 119908119879119908119903 The transportation time from warehouse 119908 to
retailer 119903119879119887119900119898
119891119901 The production time of part 119901 in facility 119891
1198611198741198721199011015840119901 The amount for part 119901 reproducing as part
1199011015840
119875119879119901Theweighting of transportation costs for part 119901
119875119868119901 The weighting of inventory costs for part 119901
119863119905119903119901 The required quantities of part 119901 for retailer 119903 at
time 119905119879119860119883119899 The tax in nation 119899
119863119880119879119884119899119901 The import tax of part 119901 in nation 119899
119871119874119862119899V The vendor 119907 in nation 119899
119871119874119862119899119891 The facility 119891 in nation 119899
119871119874119862119899119908 The warehouse 119908 in nation 119899
119871119874119862119899119903 The retailer 119903 in nation 119899
119872 119880119891119901 The supplied upper level of part 119901 in the
facility 119891119877 119880V119891119901 The supplied upper level of part 119901 fromvendor V to facility 119891119877 1198801198911198911015840119901 The supplied upper level of part 119901 from
facility 119891 to facility 1198911015840
119877 119880119891119908119901
The supplied upper level of part 119901 fromfacility 119891 to warehouse 119908119877 119880119908119903119901
The supplied upper level of part 119901 fromwarehouse 119908 to retailer 119903119868 119880119891119901The inventoried upper level of part 119901 in facility
119891119868 119880119908119901 The inventoried upper level of part 119901 in
warehouse 119908
All decision variables in global SCM are also compos-itestyle with lowercase suffix alphabet characters The detailsof decision variables (integer variables) are described below
119877119905V119891119901 The amount of part 119901 transported from vendor
V to facility 119891 at time 119905
119872119905119891119901 The amount of part 119901 produced in facility 119891 at
time 119905
1198771199051198911198911015840119901 The amount of part 119901 transported from facility
119891 to facility 1198911015840 at time 119905
119877119905119891119908119901
The amount of part 119901 transported from facility119891 to warehouse 119908 at time 119905
119877119905119908119903119901
The amount of part 119901 transported from ware-house 119908 to retailer 119903 at time 119905
119868119905119891119901 The inventory of part 119901 in facility 119891 at time 119905
119868119905119908119901
The inventory of part 119901 in warehouse 119908 at time 119905
119877119861119905V119891119901 The amount of bonded part 119901 transported
from vendor V to facility 119891 at time 119905
119872119861119905119891119901 The amount of bonded part 119901 produced in
facility 119891 at time 119905
1198771198611199051198911198911015840119901 The amount of bonded part 119901 transported
from facility 119891 to facility 1198911015840 at time 119905
119877119861119905119891119908119901
The amount of bonded part 119901 transportedfrom facility 119891 to warehouse 119908 at time 119905
119868119861119905119891119901 The inventory of bonded part 119901 in facility 119891 at
time 119905
22 A Proposed Model We separately use 119894119887119905+
119905119899 119894119887119905minus
119905119899 and
119879119860119883119899as the symbols of sales profits losses and taxes in each
nation at different timesThe objective of the proposedmodelis to maximize the sales profits associated with inventoryproduction transpiration and distribution in each nation ata period of timesThe linear global SCMmodel is formulatedas followsA Global SCMModel
Maximize sum
119905isin119879 119899isin119873
((1 minus 119879119860119883119899) 119894119887119905+
119905119899minus 119894119887119905minus
119905119899) (1)
subject to
119894119887119905+
119905119899minus 119894119887119905minus
119905119899
= sum
119901
( sum
119908isin119882 119903isin119877 119901isin119875
(119877119905119908119903119901
lowast
(119875119877119868119862119864119908119901
minus 119875119879119901
lowast 119879119862119874119878119879119908119903
))
(2)
4 Journal of Optimization
minus sum
119891isin119865119908isin119882 119901isin119875
(119877119905119891119908119901
lowast (119879119875119877119868119862119864119891119901
+ 119875119879119901
lowast 119879119862119874119878119879119891119908
))
(3)
minus sum
119891isin119865119908isin119882119901isin119875
((119877119905119891119908119901
minus 119877119861119905119891119908119901
)
lowast 119879119875119877119868119862119864119891119901
lowast 119863119880119879119884119899119901
)
(4)
minus sum
119908isin119882119901isin119875
(119868119905119908119901
lowast 119875119868119901
lowast 119868119862119874119878119879119908
) (5)
minus sum
119908isin119882
(119865119862119874119878119879119908
) (6)
+ sum
119891isin119865119908isin119882119901isin119875
(119877119905119891119908119901
lowast 119879119875119877119868119862119864119891119901
) (7)
+ sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911198911015840119901
lowast 119879119875119877119868119862119864119891119901
) (8)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911015840119891119901
lowast (1198791198751198771198681198621198641198911015840119901
+119875119879119901
lowast 1198791198621198741198781198791198911015840119891))
(9)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
((1198771199051198911015840119891119901
minus 1198771198611199051198911015840119891119901
)
lowast1198791198751198771198681198621198641198911015840119901
lowast 119863119880119879119884119899119901
)
(10)
minus sum
Visin119881119891isin119865119901isin119875
(119877119905V119891119901
lowast (119875119875119877119868119862119864V119901 + 119875119879119901
lowast 119879119862119874119878119879V119891))
(11)
minus sum
Visin119881119891isin119865119901isin119875
((119877119905V119891119901 minus 119877119861
119905V119891119901)
lowast119875119875119877119868119862119864V119901 lowast 119863119880119879119884119899119901
)
(12)
minus sum
119891isin119865119901isin119875
(119872119905119891119901
lowast 119872119862119874119878119879119891119901
) (13)
minus sum
119891isin119865119901isin119875
(119868119905119891119901
lowast PI119901
lowast 119868119862119874119878119879119891) (14)
minus sum
119891isin119865119901isin119875
(119865119862119874119878119879119891)) for 119905 isin 119879 119899 isin 119873 (15)
where all decision variables (ie 119877119905V119891119901 119872119905119891119901 etc) belong to
integersThe objective is to maximize the profits (ie expression
(1)) in the global SCMmodelThe revenue of sales (or losses)are obtained from the following statements
Income Statement
(2) sales of part 119901 in warehouse 119908 minus transporta-tion costs from warehouse 119908 to retailer 119903
(7) transfer price of part 119901 from facility 119891 towarehouses 119908 (ie transfer price)
(8) transfer price of part 119901 from facility 119891 to facility1198911015840 (ie transfer price)
Cost Statement
(3) transportation and ordering costs from facility 119891
to warehouse 119908
(4) import duty of part 119901 from facility 119891 to ware-house 119908
(5) inventory costs of part 119901 in warehouse 119908
(6) fixed cost in warehouse 119908
(9) transportation and ordering costs from facility 119891
to warehouse 119908
(10) import duty of part 119901 from facility 119891 tofacility 119891
1015840
(11) transportation and ordering costs from vendor Vto facility 119891
(12) import duty of parts from vendor V to facility
(13) production cost in facility 119891
(14) inventory cost in warehouse 119908
(15) fixed costs in facilities
Continuously there are two kinds of constraints in theproposed model One is flow conservation and the other isupper-lower bound constraints which are described belowFlow Conservation
We have
119868119905119891119901
+ sum
Visin119881
119877(119905minus119879V119891)V119891119901
+ sum
1198911015840isin119865 1198911015840= 119891
119877(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872(119905minus119879119887119900119898
119891119901)119891119901
minus sum
1199011015840isin119875 119901 = 119901
1015840
BOM1199011015840119901
lowast 1198721199051198911199011015840 minus sum
1198911015840isin1198651198911015840= 119891
1198771199051198911198911015840119901
minus sum
119908isin119882
119877119905119891119908119901
= 119868(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(16)
Journal of Optimization 5
119868119905119908119901
+ sum
119891isin119865
119877(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(17)
119868119861119905119891119901
+ sum
Visin119881
119877119861(119905minus119879V119891)V119891119901
+ sum
1198911015840isin1198651198911015840= 119891
119877119861(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872119861(119905minus119879119887119900119898
119891119901)119891119901 minus sum
1199011015840isin1198751199011015840= 119901
BOM1199011015840119901
lowast 1198721198611199051198911199011015840
minus sum
1198911015840
1198771198611199051198911198911015840119901
minus sum
119908
119877119861119905119891119908119901
= 119868119861(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(18)
119868119861119905119908119901
+ sum
119891isin119865
119877119861(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868119861(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(19)
sum
119908isin119882
119877(119905minus119879119908119903)119908119903119901
= 119863119905119903119901
forall119905 isin 119879 119903 isin 119877 119901 isin 119875 (20)
These flow conservation constraints are described as follows
(16) the limitation of the flow conservation in eachfacility(17) the limitation of the flow conservation in eachwarehouse(18) the limited bonded parts of the flow conservationin each facility(19) the limited bonded parts of the flow conservationin each warehouse(20) all of the supplied goods satisfy with retailerdemand
Upper-Lower BoundWe have
119872119905119891119901
le 119872 119880119891119901
(21)
119868119905119891119901
le 119868 119880119891119901
(22)
119868119905119908119901
le 119868 119880119908119901
(23)
119877119905V119891119901 le 119877 119880V119891119901 (24)
1198771199051198911198911015840119901
le 119877 1198801198911198911015840119901 (25)
119877119905119891119908119901
le 119877 119880119891119908119901
(26)
119877119905119908119903119901
le 119877 119880119908119903119901
(27)
119877119861119905V119891119901 le 119877
119905V119891119901 (28)
1198771198611199051198911198911015840119901
le 1198771199051198911198911015840119901 (29)
119877119861119905119891119908119901
le 119877119905119891119908119901
(30)
for 119905 isin 119879 V isin 119881 119891 1198911015840
isin 119865 and 119891 = 1198911015840 119901 isin 119875 119908 isin 119882 and
119903 isin 119877
Table 1 Profit ratio
Items Objective Profit ratioHaving bondedwarehouse (Hb) $603010 146uarr ((Hb minus Wb) Hb)
Without bondedwarehouse (Wb) $514680
Table 2 Vendor location
119871119874119862V V1
V2
V3
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 3 Facility location
119871119874119862119891
1198911
1198912
1198913
1198914
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 4 Warehouse location
119871119874119862119908
1199081
1199082
1199083
1199084
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 5 Retailer location
119871119874119862119903
1199031
1199032
1199033
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 6 The weighting of transportation costs of parts
119875119879119901
1199011
1199012
1199013
1199014
1199015
Weighting 1 02 08 01 05
The upper-lower bound constraints are noted as follows
(21) capacities in which facilities produce goods
(22) inventory of parts in facilities
(23) inventory of parts in warehouses
(24) quantities of raw parts transported from vendorsto facilities
(25) quantities of parts transported from facilities tofacilities
(26) quantities of parts transported from facilities towarehouses
(27) quantities of parts transported from the ware-house to retailers
(28) quantities of bonded parts transported fromvendors to facilities
(29) quantities of bonded parts transported fromfacilities to other facilities
(30) quantities of bonded parts transported fromfacilities to warehouses
6 Journal of Optimization
Table 7 The weighting of inventory costs of parts
119875119868119901
1199011
1199012
1199013
1199014
1199015
Weighting 05 01 05 01 04
Table 8 The duty of parts in different nations
119863119880119879119884119899119901
1199011
1199012
1199013
1199014
1199015
1198991
02 03 02 001 0051198992
03 002 03 001 011198993
01 001 01 005 003
Table 9 The tax in different nations
119879119886119909119899
1198991
1198992
1198993
007 003 008
Table 10 Sales price of each part for each vendor
119875119875119877119868119862119864V119901 1199011
1199012
1199013
1199014
1199015
V1
28V2
40V3
40 30All blank cells are disabled
Table 11 Maximum supplied limitation in each vendor
119877 119880V119891119901 1198911
1198912
1198913
1198914
V1
0 1199014
= 1000 0 0V2
0 0 1199015
= 500 1199015
= 500
V3
1199012
= 750 1199014
= 1500 0 1199013
= 1500 1199012
= 700
All blank cells are disabled
Table 12 Production costs and limitations for each facility
119872119862119874119878119879119891119901119872 119880
1198911199011199011
1199012
1199013
1199014
1199015
1198911
204001198912
303501198913
283001198914
30450All blank cells are disabled
Table 13 Transportation costs and lead time from each vendor toeach facility
119879119862119874119878119879V119891119879V119891 1198911
1198912
1198913
1198914
V1
31V2
11 11V3
42 31 21
3 A Procedure of Global SCM
There are different procedures in a global supply chain envi-ronment such as optimal transportation in logistic manage-ment demand forecasting in preprocessing bill of materialsrsquo(BOM) table and considering the liberalization policies withbonded warehouses These procedures are discussed below
Table 14 Amount of part 119901 needed for producing part 1199011015840
119861119874119872 1199011015840
11199011015840
21199011015840
31199011015840
41199011015840
5
1199011
0 2 1 0 01199012
0 0 0 0 01199013
0 0 0 1 11199014
0 0 0 0 01199015
0 0 0 0 0
Table 15The lead time of the facility for producing part1199011015840 and sales
price in the facility
119879119887119900119898119891119901
119879119875119877119868119862119864119891119901
1199011
1199012
1199013
1199014
1199015
1198911
12501198912
11501198913
11501198914
1260All blank cells are disabled
Table 16 The base of inventory costs
119868119862119874119878119879119891
1198911
1198912
1198913
1198914
6 2 1 12
Table 17 Maximum stock level in each facility
119868 119880119891119901
1199011
1199012
1199013
1199014
1199015
1198911
200 400 200 0 01198912
0 0 300 300 3001198913
0 0 400 400 4001198914
100 200 100 0 0
Table 18 Transportation costs and lead time from one facility toanother facility
11987911986211987411987811987911989111989110158401198791198911198911015840 119891
11198912
1198913
1198914
1198911
1198912
221198913
321198914
All blank cells are disabled
Table 19 Maximum transferable quantity from one facility toanother facility
119877 1198801198911198911015840119901
1198911
1198912
1198913
1198914
1198911
0 0 0 01198912
1199013
= 1000 0 0 01198913
0 0 0 1199013
= 1000
1198914
0 0 0 0
31 Logistic Management In this study we assume thata global SCM goes through four stages such as procure-ment production warehousing and distribution (ie 119879V119891 +
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
4 Journal of Optimization
minus sum
119891isin119865119908isin119882 119901isin119875
(119877119905119891119908119901
lowast (119879119875119877119868119862119864119891119901
+ 119875119879119901
lowast 119879119862119874119878119879119891119908
))
(3)
minus sum
119891isin119865119908isin119882119901isin119875
((119877119905119891119908119901
minus 119877119861119905119891119908119901
)
lowast 119879119875119877119868119862119864119891119901
lowast 119863119880119879119884119899119901
)
(4)
minus sum
119908isin119882119901isin119875
(119868119905119908119901
lowast 119875119868119901
lowast 119868119862119874119878119879119908
) (5)
minus sum
119908isin119882
(119865119862119874119878119879119908
) (6)
+ sum
119891isin119865119908isin119882119901isin119875
(119877119905119891119908119901
lowast 119879119875119877119868119862119864119891119901
) (7)
+ sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911198911015840119901
lowast 119879119875119877119868119862119864119891119901
) (8)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
(1198771199051198911015840119891119901
lowast (1198791198751198771198681198621198641198911015840119901
+119875119879119901
lowast 1198791198621198741198781198791198911015840119891))
(9)
minus sum
1198911015840119891isin119865119891
1015840= 119891119901isin119875
((1198771199051198911015840119891119901
minus 1198771198611199051198911015840119891119901
)
lowast1198791198751198771198681198621198641198911015840119901
lowast 119863119880119879119884119899119901
)
(10)
minus sum
Visin119881119891isin119865119901isin119875
(119877119905V119891119901
lowast (119875119875119877119868119862119864V119901 + 119875119879119901
lowast 119879119862119874119878119879V119891))
(11)
minus sum
Visin119881119891isin119865119901isin119875
((119877119905V119891119901 minus 119877119861
119905V119891119901)
lowast119875119875119877119868119862119864V119901 lowast 119863119880119879119884119899119901
)
(12)
minus sum
119891isin119865119901isin119875
(119872119905119891119901
lowast 119872119862119874119878119879119891119901
) (13)
minus sum
119891isin119865119901isin119875
(119868119905119891119901
lowast PI119901
lowast 119868119862119874119878119879119891) (14)
minus sum
119891isin119865119901isin119875
(119865119862119874119878119879119891)) for 119905 isin 119879 119899 isin 119873 (15)
where all decision variables (ie 119877119905V119891119901 119872119905119891119901 etc) belong to
integersThe objective is to maximize the profits (ie expression
(1)) in the global SCMmodelThe revenue of sales (or losses)are obtained from the following statements
Income Statement
(2) sales of part 119901 in warehouse 119908 minus transporta-tion costs from warehouse 119908 to retailer 119903
(7) transfer price of part 119901 from facility 119891 towarehouses 119908 (ie transfer price)
(8) transfer price of part 119901 from facility 119891 to facility1198911015840 (ie transfer price)
Cost Statement
(3) transportation and ordering costs from facility 119891
to warehouse 119908
(4) import duty of part 119901 from facility 119891 to ware-house 119908
(5) inventory costs of part 119901 in warehouse 119908
(6) fixed cost in warehouse 119908
(9) transportation and ordering costs from facility 119891
to warehouse 119908
(10) import duty of part 119901 from facility 119891 tofacility 119891
1015840
(11) transportation and ordering costs from vendor Vto facility 119891
(12) import duty of parts from vendor V to facility
(13) production cost in facility 119891
(14) inventory cost in warehouse 119908
(15) fixed costs in facilities
Continuously there are two kinds of constraints in theproposed model One is flow conservation and the other isupper-lower bound constraints which are described belowFlow Conservation
We have
119868119905119891119901
+ sum
Visin119881
119877(119905minus119879V119891)V119891119901
+ sum
1198911015840isin119865 1198911015840= 119891
119877(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872(119905minus119879119887119900119898
119891119901)119891119901
minus sum
1199011015840isin119875 119901 = 119901
1015840
BOM1199011015840119901
lowast 1198721199051198911199011015840 minus sum
1198911015840isin1198651198911015840= 119891
1198771199051198911198911015840119901
minus sum
119908isin119882
119877119905119891119908119901
= 119868(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(16)
Journal of Optimization 5
119868119905119908119901
+ sum
119891isin119865
119877(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(17)
119868119861119905119891119901
+ sum
Visin119881
119877119861(119905minus119879V119891)V119891119901
+ sum
1198911015840isin1198651198911015840= 119891
119877119861(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872119861(119905minus119879119887119900119898
119891119901)119891119901 minus sum
1199011015840isin1198751199011015840= 119901
BOM1199011015840119901
lowast 1198721198611199051198911199011015840
minus sum
1198911015840
1198771198611199051198911198911015840119901
minus sum
119908
119877119861119905119891119908119901
= 119868119861(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(18)
119868119861119905119908119901
+ sum
119891isin119865
119877119861(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868119861(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(19)
sum
119908isin119882
119877(119905minus119879119908119903)119908119903119901
= 119863119905119903119901
forall119905 isin 119879 119903 isin 119877 119901 isin 119875 (20)
These flow conservation constraints are described as follows
(16) the limitation of the flow conservation in eachfacility(17) the limitation of the flow conservation in eachwarehouse(18) the limited bonded parts of the flow conservationin each facility(19) the limited bonded parts of the flow conservationin each warehouse(20) all of the supplied goods satisfy with retailerdemand
Upper-Lower BoundWe have
119872119905119891119901
le 119872 119880119891119901
(21)
119868119905119891119901
le 119868 119880119891119901
(22)
119868119905119908119901
le 119868 119880119908119901
(23)
119877119905V119891119901 le 119877 119880V119891119901 (24)
1198771199051198911198911015840119901
le 119877 1198801198911198911015840119901 (25)
119877119905119891119908119901
le 119877 119880119891119908119901
(26)
119877119905119908119903119901
le 119877 119880119908119903119901
(27)
119877119861119905V119891119901 le 119877
119905V119891119901 (28)
1198771198611199051198911198911015840119901
le 1198771199051198911198911015840119901 (29)
119877119861119905119891119908119901
le 119877119905119891119908119901
(30)
for 119905 isin 119879 V isin 119881 119891 1198911015840
isin 119865 and 119891 = 1198911015840 119901 isin 119875 119908 isin 119882 and
119903 isin 119877
Table 1 Profit ratio
Items Objective Profit ratioHaving bondedwarehouse (Hb) $603010 146uarr ((Hb minus Wb) Hb)
Without bondedwarehouse (Wb) $514680
Table 2 Vendor location
119871119874119862V V1
V2
V3
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 3 Facility location
119871119874119862119891
1198911
1198912
1198913
1198914
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 4 Warehouse location
119871119874119862119908
1199081
1199082
1199083
1199084
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 5 Retailer location
119871119874119862119903
1199031
1199032
1199033
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 6 The weighting of transportation costs of parts
119875119879119901
1199011
1199012
1199013
1199014
1199015
Weighting 1 02 08 01 05
The upper-lower bound constraints are noted as follows
(21) capacities in which facilities produce goods
(22) inventory of parts in facilities
(23) inventory of parts in warehouses
(24) quantities of raw parts transported from vendorsto facilities
(25) quantities of parts transported from facilities tofacilities
(26) quantities of parts transported from facilities towarehouses
(27) quantities of parts transported from the ware-house to retailers
(28) quantities of bonded parts transported fromvendors to facilities
(29) quantities of bonded parts transported fromfacilities to other facilities
(30) quantities of bonded parts transported fromfacilities to warehouses
6 Journal of Optimization
Table 7 The weighting of inventory costs of parts
119875119868119901
1199011
1199012
1199013
1199014
1199015
Weighting 05 01 05 01 04
Table 8 The duty of parts in different nations
119863119880119879119884119899119901
1199011
1199012
1199013
1199014
1199015
1198991
02 03 02 001 0051198992
03 002 03 001 011198993
01 001 01 005 003
Table 9 The tax in different nations
119879119886119909119899
1198991
1198992
1198993
007 003 008
Table 10 Sales price of each part for each vendor
119875119875119877119868119862119864V119901 1199011
1199012
1199013
1199014
1199015
V1
28V2
40V3
40 30All blank cells are disabled
Table 11 Maximum supplied limitation in each vendor
119877 119880V119891119901 1198911
1198912
1198913
1198914
V1
0 1199014
= 1000 0 0V2
0 0 1199015
= 500 1199015
= 500
V3
1199012
= 750 1199014
= 1500 0 1199013
= 1500 1199012
= 700
All blank cells are disabled
Table 12 Production costs and limitations for each facility
119872119862119874119878119879119891119901119872 119880
1198911199011199011
1199012
1199013
1199014
1199015
1198911
204001198912
303501198913
283001198914
30450All blank cells are disabled
Table 13 Transportation costs and lead time from each vendor toeach facility
119879119862119874119878119879V119891119879V119891 1198911
1198912
1198913
1198914
V1
31V2
11 11V3
42 31 21
3 A Procedure of Global SCM
There are different procedures in a global supply chain envi-ronment such as optimal transportation in logistic manage-ment demand forecasting in preprocessing bill of materialsrsquo(BOM) table and considering the liberalization policies withbonded warehouses These procedures are discussed below
Table 14 Amount of part 119901 needed for producing part 1199011015840
119861119874119872 1199011015840
11199011015840
21199011015840
31199011015840
41199011015840
5
1199011
0 2 1 0 01199012
0 0 0 0 01199013
0 0 0 1 11199014
0 0 0 0 01199015
0 0 0 0 0
Table 15The lead time of the facility for producing part1199011015840 and sales
price in the facility
119879119887119900119898119891119901
119879119875119877119868119862119864119891119901
1199011
1199012
1199013
1199014
1199015
1198911
12501198912
11501198913
11501198914
1260All blank cells are disabled
Table 16 The base of inventory costs
119868119862119874119878119879119891
1198911
1198912
1198913
1198914
6 2 1 12
Table 17 Maximum stock level in each facility
119868 119880119891119901
1199011
1199012
1199013
1199014
1199015
1198911
200 400 200 0 01198912
0 0 300 300 3001198913
0 0 400 400 4001198914
100 200 100 0 0
Table 18 Transportation costs and lead time from one facility toanother facility
11987911986211987411987811987911989111989110158401198791198911198911015840 119891
11198912
1198913
1198914
1198911
1198912
221198913
321198914
All blank cells are disabled
Table 19 Maximum transferable quantity from one facility toanother facility
119877 1198801198911198911015840119901
1198911
1198912
1198913
1198914
1198911
0 0 0 01198912
1199013
= 1000 0 0 01198913
0 0 0 1199013
= 1000
1198914
0 0 0 0
31 Logistic Management In this study we assume thata global SCM goes through four stages such as procure-ment production warehousing and distribution (ie 119879V119891 +
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Journal of Optimization 5
119868119905119908119901
+ sum
119891isin119865
119877(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(17)
119868119861119905119891119901
+ sum
Visin119881
119877119861(119905minus119879V119891)V119891119901
+ sum
1198911015840isin1198651198911015840= 119891
119877119861(119905minus1198791198911015840119891)1198911015840119891119901
+ 119872119861(119905minus119879119887119900119898
119891119901)119891119901 minus sum
1199011015840isin1198751199011015840= 119901
BOM1199011015840119901
lowast 1198721198611199051198911199011015840
minus sum
1198911015840
1198771198611199051198911198911015840119901
minus sum
119908
119877119861119905119891119908119901
= 119868119861(119905+1)119891119901
forall119905 isin 119879 119891 isin 119865 119901 isin 119875
(18)
119868119861119905119908119901
+ sum
119891isin119865
119877119861(119905minus119879119891119908)119891119908119901
minus sum
119903isin119877
119877119905119908119903119901
= 119868119861(119905+1)119908119901
forall119905 isin 119879 119908 isin 119882 119901 isin 119875
(19)
sum
119908isin119882
119877(119905minus119879119908119903)119908119903119901
= 119863119905119903119901
forall119905 isin 119879 119903 isin 119877 119901 isin 119875 (20)
These flow conservation constraints are described as follows
(16) the limitation of the flow conservation in eachfacility(17) the limitation of the flow conservation in eachwarehouse(18) the limited bonded parts of the flow conservationin each facility(19) the limited bonded parts of the flow conservationin each warehouse(20) all of the supplied goods satisfy with retailerdemand
Upper-Lower BoundWe have
119872119905119891119901
le 119872 119880119891119901
(21)
119868119905119891119901
le 119868 119880119891119901
(22)
119868119905119908119901
le 119868 119880119908119901
(23)
119877119905V119891119901 le 119877 119880V119891119901 (24)
1198771199051198911198911015840119901
le 119877 1198801198911198911015840119901 (25)
119877119905119891119908119901
le 119877 119880119891119908119901
(26)
119877119905119908119903119901
le 119877 119880119908119903119901
(27)
119877119861119905V119891119901 le 119877
119905V119891119901 (28)
1198771198611199051198911198911015840119901
le 1198771199051198911198911015840119901 (29)
119877119861119905119891119908119901
le 119877119905119891119908119901
(30)
for 119905 isin 119879 V isin 119881 119891 1198911015840
isin 119865 and 119891 = 1198911015840 119901 isin 119875 119908 isin 119882 and
119903 isin 119877
Table 1 Profit ratio
Items Objective Profit ratioHaving bondedwarehouse (Hb) $603010 146uarr ((Hb minus Wb) Hb)
Without bondedwarehouse (Wb) $514680
Table 2 Vendor location
119871119874119862V V1
V2
V3
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 3 Facility location
119871119874119862119891
1198911
1198912
1198913
1198914
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 4 Warehouse location
119871119874119862119908
1199081
1199082
1199083
1199084
Location 1 (Taiwan) 2 (China) 2 (China) 3 (Japan)
Table 5 Retailer location
119871119874119862119903
1199031
1199032
1199033
Location 1 (Taiwan) 2 (China) 3 (Japan)
Table 6 The weighting of transportation costs of parts
119875119879119901
1199011
1199012
1199013
1199014
1199015
Weighting 1 02 08 01 05
The upper-lower bound constraints are noted as follows
(21) capacities in which facilities produce goods
(22) inventory of parts in facilities
(23) inventory of parts in warehouses
(24) quantities of raw parts transported from vendorsto facilities
(25) quantities of parts transported from facilities tofacilities
(26) quantities of parts transported from facilities towarehouses
(27) quantities of parts transported from the ware-house to retailers
(28) quantities of bonded parts transported fromvendors to facilities
(29) quantities of bonded parts transported fromfacilities to other facilities
(30) quantities of bonded parts transported fromfacilities to warehouses
6 Journal of Optimization
Table 7 The weighting of inventory costs of parts
119875119868119901
1199011
1199012
1199013
1199014
1199015
Weighting 05 01 05 01 04
Table 8 The duty of parts in different nations
119863119880119879119884119899119901
1199011
1199012
1199013
1199014
1199015
1198991
02 03 02 001 0051198992
03 002 03 001 011198993
01 001 01 005 003
Table 9 The tax in different nations
119879119886119909119899
1198991
1198992
1198993
007 003 008
Table 10 Sales price of each part for each vendor
119875119875119877119868119862119864V119901 1199011
1199012
1199013
1199014
1199015
V1
28V2
40V3
40 30All blank cells are disabled
Table 11 Maximum supplied limitation in each vendor
119877 119880V119891119901 1198911
1198912
1198913
1198914
V1
0 1199014
= 1000 0 0V2
0 0 1199015
= 500 1199015
= 500
V3
1199012
= 750 1199014
= 1500 0 1199013
= 1500 1199012
= 700
All blank cells are disabled
Table 12 Production costs and limitations for each facility
119872119862119874119878119879119891119901119872 119880
1198911199011199011
1199012
1199013
1199014
1199015
1198911
204001198912
303501198913
283001198914
30450All blank cells are disabled
Table 13 Transportation costs and lead time from each vendor toeach facility
119879119862119874119878119879V119891119879V119891 1198911
1198912
1198913
1198914
V1
31V2
11 11V3
42 31 21
3 A Procedure of Global SCM
There are different procedures in a global supply chain envi-ronment such as optimal transportation in logistic manage-ment demand forecasting in preprocessing bill of materialsrsquo(BOM) table and considering the liberalization policies withbonded warehouses These procedures are discussed below
Table 14 Amount of part 119901 needed for producing part 1199011015840
119861119874119872 1199011015840
11199011015840
21199011015840
31199011015840
41199011015840
5
1199011
0 2 1 0 01199012
0 0 0 0 01199013
0 0 0 1 11199014
0 0 0 0 01199015
0 0 0 0 0
Table 15The lead time of the facility for producing part1199011015840 and sales
price in the facility
119879119887119900119898119891119901
119879119875119877119868119862119864119891119901
1199011
1199012
1199013
1199014
1199015
1198911
12501198912
11501198913
11501198914
1260All blank cells are disabled
Table 16 The base of inventory costs
119868119862119874119878119879119891
1198911
1198912
1198913
1198914
6 2 1 12
Table 17 Maximum stock level in each facility
119868 119880119891119901
1199011
1199012
1199013
1199014
1199015
1198911
200 400 200 0 01198912
0 0 300 300 3001198913
0 0 400 400 4001198914
100 200 100 0 0
Table 18 Transportation costs and lead time from one facility toanother facility
11987911986211987411987811987911989111989110158401198791198911198911015840 119891
11198912
1198913
1198914
1198911
1198912
221198913
321198914
All blank cells are disabled
Table 19 Maximum transferable quantity from one facility toanother facility
119877 1198801198911198911015840119901
1198911
1198912
1198913
1198914
1198911
0 0 0 01198912
1199013
= 1000 0 0 01198913
0 0 0 1199013
= 1000
1198914
0 0 0 0
31 Logistic Management In this study we assume thata global SCM goes through four stages such as procure-ment production warehousing and distribution (ie 119879V119891 +
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
6 Journal of Optimization
Table 7 The weighting of inventory costs of parts
119875119868119901
1199011
1199012
1199013
1199014
1199015
Weighting 05 01 05 01 04
Table 8 The duty of parts in different nations
119863119880119879119884119899119901
1199011
1199012
1199013
1199014
1199015
1198991
02 03 02 001 0051198992
03 002 03 001 011198993
01 001 01 005 003
Table 9 The tax in different nations
119879119886119909119899
1198991
1198992
1198993
007 003 008
Table 10 Sales price of each part for each vendor
119875119875119877119868119862119864V119901 1199011
1199012
1199013
1199014
1199015
V1
28V2
40V3
40 30All blank cells are disabled
Table 11 Maximum supplied limitation in each vendor
119877 119880V119891119901 1198911
1198912
1198913
1198914
V1
0 1199014
= 1000 0 0V2
0 0 1199015
= 500 1199015
= 500
V3
1199012
= 750 1199014
= 1500 0 1199013
= 1500 1199012
= 700
All blank cells are disabled
Table 12 Production costs and limitations for each facility
119872119862119874119878119879119891119901119872 119880
1198911199011199011
1199012
1199013
1199014
1199015
1198911
204001198912
303501198913
283001198914
30450All blank cells are disabled
Table 13 Transportation costs and lead time from each vendor toeach facility
119879119862119874119878119879V119891119879V119891 1198911
1198912
1198913
1198914
V1
31V2
11 11V3
42 31 21
3 A Procedure of Global SCM
There are different procedures in a global supply chain envi-ronment such as optimal transportation in logistic manage-ment demand forecasting in preprocessing bill of materialsrsquo(BOM) table and considering the liberalization policies withbonded warehouses These procedures are discussed below
Table 14 Amount of part 119901 needed for producing part 1199011015840
119861119874119872 1199011015840
11199011015840
21199011015840
31199011015840
41199011015840
5
1199011
0 2 1 0 01199012
0 0 0 0 01199013
0 0 0 1 11199014
0 0 0 0 01199015
0 0 0 0 0
Table 15The lead time of the facility for producing part1199011015840 and sales
price in the facility
119879119887119900119898119891119901
119879119875119877119868119862119864119891119901
1199011
1199012
1199013
1199014
1199015
1198911
12501198912
11501198913
11501198914
1260All blank cells are disabled
Table 16 The base of inventory costs
119868119862119874119878119879119891
1198911
1198912
1198913
1198914
6 2 1 12
Table 17 Maximum stock level in each facility
119868 119880119891119901
1199011
1199012
1199013
1199014
1199015
1198911
200 400 200 0 01198912
0 0 300 300 3001198913
0 0 400 400 4001198914
100 200 100 0 0
Table 18 Transportation costs and lead time from one facility toanother facility
11987911986211987411987811987911989111989110158401198791198911198911015840 119891
11198912
1198913
1198914
1198911
1198912
221198913
321198914
All blank cells are disabled
Table 19 Maximum transferable quantity from one facility toanother facility
119877 1198801198911198911015840119901
1198911
1198912
1198913
1198914
1198911
0 0 0 01198912
1199013
= 1000 0 0 01198913
0 0 0 1199013
= 1000
1198914
0 0 0 0
31 Logistic Management In this study we assume thata global SCM goes through four stages such as procure-ment production warehousing and distribution (ie 119879V119891 +
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Journal of Optimization 7
Table 20 The base of inventory costs and fixed costs
119868119862119874119878119879119908
(119865119862119874119878119879119908)
1199081
1199082
1199083
1199084
5 (50) 1 (10) 1 (10) 10 (100)
Table 21 Transportation costs and lead time from the facility to thewarehouse
119879119862119874119878119879119891119908
119879119891119908
1199081
1199082
1199083
1199084
1198911
111198912
21 11198913
111198914
11All blank cells are disabled
Table 22 Maximum transferable quantity from the facility to thewarehouse
119877 119880119891119908119901
1199081
1199082
1199083
1199084
1198911
1199011
= 800 0 0 01198912
1199013
= 800 1199013
= 600 0 01198913
0 0 1199013
= 1000 01198914
1199011
= 700 0 0 0
Table 23 Transportation costs and lead time from the warehouse tothe retailer
119879119862119874119878119879119908119903
(119879119908119903
) 1199031
1199032
1199033
1199081
1 (1) 3 (1)1199082
2 (2) 1 (1)1199083
1 (1)1199084
1 (1)All blank cells are disabled
Table 24 Maximum transferable quantity from the warehouse tothe retailer
119877 119880119908119903119901
1199031
1199032
1199033
1199081
1199011
= 700 1199013
= 800 0 1199011
= 300
1199082
1199013
= 800 1199013
= 8000 01199083
0 1199013
= 800 01199084
0 0 1199011
= 1000
Table 25 Sales price of each part and limitation in each warehouse
119875119877119868119862119864119908119901
119868 119880119908119901
1199011
1199012
1199013
1199014
1199015
1199081
380300 0 280300 0 01199082
0 0 200500 0 01199083
0 0 200600 0 01199084
450150 0 0 0 0
119879119891 119861119900119898
+ [1198791198911198911015840 + 119879119891 119861119900119898
] + 119879119891119908
+ 119879119908119903
) where the semifinishedgoods will be transferred to another facility for reproduction(ie [119879
1198911198911015840 + 1198791198911015840119861119900119898
]) to enhance the transfer price of goodsThe course of the logistic management needs to go through aphase or a cycle (ie 119905 = 1 2 119899) The processing flow ofglobal SCM is presented in Figure 3
In order to avoid delaying the demand of retailers in thefuture in the beginning we let the quantities of inventoriesequal zero in each stage in the first phase Then we will add119898 times for utilizing demand forecast method The periodof 119899 + 119898 times will be calculated in this global Occurringin the period from (119899 + 1) to (119899 + 119898) times all of thegoods in transportation and processing will be restored to theinventories of the adjacent warehouses
32 Demand Forecast MethodmdashTime Series Analysis Asmentioned above we need to forecast the quantity of retailersrsquo(ie customer) demand Time series forecasting is a well-known method [31 32] to forecast future demands based onknown past events
By referring to Lirsquos method [33] we then have thefollowing nonlinear time series analysisrsquo modelA Nonlinear Demand Forecasting Model (NDF Model)
Min119879
sum
119905=1
1003816100381610038161003816119878119905 minus (119886 + 119887119876119905) 119910119905
1003816100381610038161003816(31)
st 119910119905
= 1199101199051015840 (forall119905 119905
1015840 and 119905 = 1199051015840
which mean
119905 and 1199051015840 belong to the same quarter)
(32)
119896
sum
119905=1
119910119905
= 119896 (33)
119910119905
ge 0 119878119905 119886 and 119887 are free sign variables
(34)
where 119896 is sum of seasons (usually 119896 = 4) and 119878119905 119876119905 and
119910119905denotes the sales quarter numbers and seasonal indexes
respectively For example if 119879 = 8 then 119905 = (1 5) representthe first quarter 119905 = (2 6) represent the second quarter 119905 =
(3 7) represent the third quarter and 119905 = (4 8) represent thefourth quarter
A NDF model is nonlinear because of existing absolutefunctions and nonlinear terms Following linear systems canlinearize them The linear approximation of the function1198651119905
(119886 119910119905) = 119886119910
119905is a continuous function 119891
1119905(119886 119910119905) which
is equal to 1198651119905
(119886 119910119905) (ie 119891
1119905(1198861198971
1198861199051198972
) = 1198651119905
(119886 119910119905) at each
grid point (1198971 1198972)) and a linear function of its variables (119886 119910
119905)
on the interior or edges of each of the indicated triangles Todescribe the linear approximation of the function 119865
1119905(119886 119910119905)
we then have the following linear system (referring to themodels in Babayev [34])
Let
1198911119905
(119886 119910119905) = 119886119910
119905cong 120572119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
1198651119894
(11988911198971
11988921199051198972
) 12059611989711198972
(35)
119886 =
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988911198971
12059611989711198972
(36)
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
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Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
8 Journal of Optimization
Table 26 Retailer demand and forecasting at each time
Retailer 1198771
Retailer 1198772
Retailer 1198773
119863119905119903119901
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
1199011
1199012
1199013
1199014
1199015
119905 = 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0119905 = 6 0 0 180 0 0 0 0 120 0 0 0 0 0 0 0119905 = 7 0 0 190 0 0 0 0 110 0 0 0 0 0 0 0119905 = 8 52 0 170 0 0 0 0 100 0 0 83 0 0 0 0119905 = 9 38 0 160 0 0 0 0 130 0 0 90 0 0 0 0119905 = 10 60 0 210 0 0 0 0 120 0 0 50 0 0 0 0119905 = 11 43 0 180 0 0 0 0 110 0 0 60 0 0 0 0119905 = 12 52 0 190 0 0 0 0 100 0 0 76 0 0 0 0119905 = 13 56 0 170 0 0 0 0 110 0 0 56 0 0 0 0119905 = 14 48 0 180 0 0 0 0 130 0 0 76 0 0 0 0119905 = 15 58 0 200 0 0 0 0 120 0 0 99 0 0 0 0119905 = 16 31 0 190 0 0 0 0 90 0 0 80 0 0 0 0119905 = 17 52 0 180 0 0 0 0 120 0 0 50 0 0 0 0
Vendor Facility Warehouse Retailers
Reproduce
Parts(materials)
Semi finishedgoods
Finished goods
Stage 1 Stage 2 Stage 3 Stage 4
Tf Tfw Trw
Tff998400
BOMp998400p
Facilityrsquo
Figure 3 Processing flow of the global SCM
119910119905
=
119898+1
sum
1198971=1
119898+1
sum
1198972=1
11988921199051198972
12059611989711198972
(37)
119898+1
sum
1198971=1
119898+1
sum
1198972=1
12059611989711198972
= 1 (38)
119898
sum
1198971=1
119898
sum
1198972=1
(11990611989711198972
+ V11989711198972
) = 1 (39)
12059611989711198972
+ 12059611989711198972+1
+ 1205961198971+11198972+1
ge 1199061198971 1198972
for 1198971
= 1 119898
1198972
= 1 119898
(40)
12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
ge V11989711198972
for 1198971
= 1 119898
1198972
= 1 119898
(41)
where 12059611989711198972
ge 0 and 11990611989711198972
V11989711198972
isin 0 1Expressions (36)sim(38) define the point (119886 119910
119905) as the con-
vex linear combination of the vertices of the chosen triangle
Expressions (39)sim(41) imply that if 11990611989711198972
= 1 then 12059611989711198972
+
12059611989711198972+1
+ 1205961198971+11198972+1
= 1 and 1198911119905
(119886 119910119905) = 1198651119905
(11988911198971
11988921199051198972
)12059611989711198972
+
1198651119905
(11988911198971
11988921199051198972+1
)12059611989711198972+1
+ 1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1 or if
V11989711198972
= 1 then 12059611989711198972
+ 1205961198971+11198972
+ 1205961198971+11198972+1
= 1 and1198911119905
(119886 119910119905) = 119865
1119905(11988911198971
11988921199051198972
)12059611989711198972
+ 1198651119905
(11988911198971+1
11988921199051198972
)1205961198971+11198972
+
1198651119905
(11988911198971+1
11988921199051198972+1
)1205961198971+11198972+1
The mentions above give a basic formulation satisfyingthe piecewise linear approximation of 119865
1119905(119886 119910119905) = 119886119910
119905cong 120572119905
Similarly 1198652119905
(119887 119910119905) = 119887119910
119905cong 120573119905can be also linearized by the
same way (for the proof refer to Babayev [34])On the other hand we use additional binary variables
to treat the absolute function A piecewisely linear demandforecasting model can be reformulated as followsA Piecewisely Linear Demand Forecasting Model (PLDFModel)
Min119879
sum
119905=1
Φ119905
(42)
st (32) and (33) (43)
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Journal of Optimization 9
Parts
2 1
1 1
0
p1
p1
p2
p2
p3
p3
p4
p4
p5
p5
minus
minus minus
minus minus
minus minus minus
minus minus minus
minusminus
minus
minus
minus
minus
minus
minus
minus
Figure 4 BOM figure
Middle-tier
Middle-tierbroker server
End users
End user 3
End user 1
End user 2
applicationserver 1
Middle-tier
Data baseBackup DB
applicationserver 2
Middle-tierapplication
servers
Figure 5 Architecture of the multitier web server
(119906119905minus 1) 119872 + 119878
119905minus (120572119905+ 120573119905119876119905)
le Φ119905
le 119878119905minus (120572119905+ 120573119905119876119905) + (1 minus 119906
119905) 119872
(44)
minus 119906119905119872 + (120572
119905+ 120573119905119876119905) minus 119878119905
le Φ119905
le (120572119905+ 120573119905119876119905) minus 119878119905+ 119906119905119872
(45)
where 119872 is a big enough constant 119906119905
isin 0 1 Φ119905
ge 0 120572119905 and
120573119905are piecewisely linear variables of 119886119910
119905and 119887119910
119905 respectively
referred to(35)ndash(41)Considering the following situations we know that the
nonlinear objective function can be linearized by linearsystem that is (44) and (45)
(i) If 119906119905
= 1 then Φ119905
= 119878119905minus (120572119905+ 120573119905119876119905) which is forced
by (44) because of Φ119905
ge 0(ii) If 119906
119905= 0 then Φ
119905= (120572119905+ 120573119905119876119905) minus 119878119905 which is forced
by (45) because of Φ119905
ge 0
33 Bill of Materials (BOM) A bill of materialsrsquo (BOM) tableis expressed as the ldquoparts listrdquo of components In order tounderstand the BOM for this global SCMmodel the symbolsof 119901 and 119901
1015840 could be expressed as a material or goods (ieparameterBOM
1199011015840119901) Hence we can utilize a two-dimensional
matrix to express the relationship between partial and goods
For example a p4with a p
5can produce a p
3 and a p
3with
two p2can produce a p
1TheBOM table of the sparsematrix is
expressed in Figure 4The aim is to design a friendly interfacefor our system design
34 Liberalization Policywith BondedWarehouses This studyproposes a global SCM model which is capable of treatingliberalization policy for bonded warehouses in the differentcountries around the world [24ndash28] A bonded warehouse isone building or any other secured area where dutiable goodsmay be stored or processed without payment of duty It maybe managed by the state or by private enterprise
While the goods are stored in the bonded warehouse theliability of exporter is temporally cancelled and the importerand warehouse proprietor incur liability These goods are inthe bonded warehouse and they may be processed by assem-bling sorting repacking or others After processing andwithin the warehousing period the goods may be exportedwithout the payment of duty or they may be withdrawn forconsumption upon payment of duty at the rate applicableto the goods in their manipulated condition at the time ofwithdrawal Bonded warehouses provide specialized storageservices such as deep freeze bulk liquid storage commodity
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
10 Journal of Optimization
BrowserInput OutputClient tier
(GUI layer)
Security module
Optimal softwaremodule
Demand forecast module
AP controller
module
Middle tier(AP server layer)
Backup DB
Server side(database layer)
Controller of web and map
Communicationmodule
(servlet EJB)
Google map
Map API
Database (DB)
DB access module
Vector map
Figure 6 Architecture of the global SCM system
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 111
p5 = 111
p5 = 83
p4 = 83
Figure 7 The logistic flow at time = 1
processing and coordination with transportation and are anintegral part of the global supply chain
The liberalization policy with bonded warehouses notonly enhances the industries competitiveness but also savesinventory production and transportation costs Of coursethe objective aims to findmore bondedwarehouses andmorecosts could be saved
4 System Development
Currently global supply chain management (global SCM)system always needs experts offering the qualities of goods inbondedwarehouses to calculate the production capacity sincethere is a lack of kernel technique (ie deterministic math-ematical model) for developing global SCM system At thesame time considering the policy of trade liberalization withbonded warehouses by manual is a difficult job Therefore
this study develops a global SCM system with optimizationtechnique to cope with the bonded warehouses for obtainingthe maximal profits automatically
41 System Design This study designs a system to apply fora global SCM system based on a proposed mathematicalmodel The architecture of the global SCM system includesan application server in the middle tier to distribute all ofthe processing jobs Establishing a Broker Server can not onlydistribute the jobs into different application servers but alsothe jobs work much more efficient The basic architecture ofthe global SCM system is shown in Figure 5
Furthermore the system architecture includes three tierswhich are composed of various modules In the first tierGUI layer an intuitive and friendly interface for users isbuilt In the second tier the application (AP) server layer
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Journal of Optimization 11
p5 = 111
p5 = 83
p4 = 83
p4 = 111
p4 = 279
p5 = 279
p5 = 90
p4 = 90
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 8 The logistic flow at time = 2
p1 = 52
p2 = 76
p5 = 76
p3 = 60
p3 = 90
p3 = 110 p3 = 110
p3 = 120
p3 = 180p3 = 190
p3 = 190
p2 = 180
p1 = 83p4 = 76
p4 = 56
p3 = 38
p3 = 170
p3 = 110
p4 = 386
p5 = 386
p5 = 56
p2 = 86
p2 = 100
p4 = 342
p5 = 342
p3 = 43f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
Figure 9 The logistics flow at time = 6
p4 = 338
p4 = 386 p3 = 52
p5 = 386p5 = 338
p5 = 76
p4 = 76
p2 = 104
p2 = 120p2 = 100
p5 = 56
p4 = 56
p3 = 60
p3 = 60
p3 = 50
p1 = 90 p1 = 83 p1 = 83
p1 = 52p1 = 38
p3 = 110
p1 = 190
p3 = 100p3 = 100
p3 = 170p3 = 160
p3 = 130
p2 = 120
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p3 = 170 p1 = 52
Figure 10 The logistic flow at time = 7
is a kernel in the global SCM system whose base is basedon the Java programming language and an optimal softwarecomponent (ie LINGOrsquos Solver) In the last tier databaselayer stores all of the data such as the username passwordenvironment setting and logistics information into databasesystem Moreover the data must be backed up to the otherdatabase to protect it from hacking or crashing Then thesystem architecture is shown in Figure 6
5 Numerical Examples
In our numerical examples we assume that the situationoccurred in three different overseas locations There are
three vendors (V1 V2 V3) four facilities (119891
1 1198912 1198913 1198914) four
warehouses (1199081 1199082 1199083 1199084) three retailers (119903
1 1199032 1199033) Under
the liberalization policies these limited quantities of bondedwarehouses are listed in the Appendix There are three parts(1199012 1199014 1199015) supplied from the vendor to the facility and the
parts be produced another two parts (11990111199013) in different
facilities The period of time includes two demands one isactual customer demand (ie 119905
119899= 15) and the other is
forecasting demand (ie 119905119898
= 2) so that the total period oftime is 17 (ie 119905 = 1 to 17)The other parameters are expressedin Tables 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1920 21 22 23 24 25 and 26 of the Appendix The numericalexample was solved via a global SCM system these logistic
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
12 Journal of Optimization
f1
f2
f3
f4
w1
w2
w3
w4
r1
r2
r3
1
2
3
p4 = 348
p5 = 348
p2 = 112
p2 = 152p2 = 120
p4 = 99p4 = 76
p5 = 76
p3 = 56
p3 = 210
p3 = 120
p1 = 38p1 = 60
p2 = 86
p3 = 60
p1 = 50 p1 = 90 p1 = 90p1 = 83
p3 = 100
p3 = 130
p3 = 160
p3 = 43
p3 = 56
p3 = 130
p5 = 99
p4 = 338
p5 = 338
p3 = 160 p1 = 38
p3 = 170 p1 = 52
Figure 11 The logistic flow at time = 8
146
153
163177
181
187
191
196
204 237
251
0
5
10
15
20
25
30
3 5 10 15 20 25 30 35 40 45 50Number of warehouses
Ratio
()
Benefit ratio
Figure 12 The tendency of the profit ratios for different numbers of warehouses
results at different times 119905 are depicted in Figures 7 8 9 10and 11
Solving the example the objective value is $603010 withconsideration of the bonded warehouses We then calculatethem without bonded warehouses again and the objectivevalue is 514680 Comparing both of them the profit ratioincreases to 146 as shown in Table 1
In order to observe the advantages of the proposedmethod this study experiments different numerical examplesby generating parameters below
(i) The total locations are randomly generated from auniform distribution according to 2 le vendors le 203 le facilities le 20 4 le warehouses le 20 and2 le retailers le 40
(ii) The period of time is randomly generated from theuniform distribution over the range of [2 16]
(iii) The capacities of bonded warehouses are accordingto the capacities of original warehouses based onuniform distribution from 50 to 90
(iv) In order to balance between the supply and demandall of the coefficients follows feasible sets for the globalSCMmodels
According to the computational results followed rules (i) to(iv) we observe that the liberalization policy with bondedwarehouses directly affects the activities of the global SCMsWhen we fixed the number of bonded warehouses to 5 theprofit ratio approaches 15 When we take the number ofbonded warehouses being 40 as an example the profit ratioenhances to 20 Finally the profit ratio is close to 25 at50 bonded warehouses That is considering that more nodeshave bounded constraints there is a greater cost saving Thetendency of the other 10 tests is depicted in Figure 12
The proposed model considers the liberalization policywith bondedwarehouses as flow-control constraints to obtainoptimal profits Additionally numerical experiments alsoillustrate that the proposedmodel can enhance the profit ratiowhen the number of bonded warehouses is large
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Journal of Optimization 13
6 Conclusions
This study proposes a global SCM model which is capableof treating liberalization policy with bonded warehousesAll of the constraints about bonded warehouses can beadded to the proposed global SCM model Additionally theproposed model is embedded into a global SCM system wedeveloped The system can automatically calculate the profitratio to further enhance the competitiveness Numericalexperimentsrsquo reports illustrate that the proposed model canbe effectively solved to obtain the optimal profit
Future research can consider different quantity discountpolicies artificial neural network method for solving theuncertainty demand forecast heuristic methods for acceler-ating solving speed and linearization technique for resolvingthe proposed demand forecasting model
Appendix
For more details see Tables 2ndash26
Acknowledgments
The authors would like to thank the editor and anonymousreferees for providing most valuable comments for us toimprove the quality of this paperThis researchwas supportedby the project granted by ROC NSC 101-2811-E-009-011
References
[1] D J Thomas and P M Griffin ldquoCoordinated supply chainmanagementrdquo European Journal of Operational Research vol94 no 1 pp 1ndash15 1996
[2] S C Graves and S P Willems ldquoOptimizing the supply chainconfiguration for new productsrdquo Management Science vol 51no 8 pp 1165ndash1180 2005
[3] H L Lee and J Rosenblatt ldquoA generalized quantity discountpricing model to increase supplierrsquos profitsrdquo Management Sci-ence vol 33 no 9 pp 1167ndash1185 1986
[4] J P Monahan ldquoA quantity pricing model to increase vendorprofitsrdquoManagement Science vol 30 no 6 pp 720ndash726 1984
[5] C Hofmann ldquoSupplierrsquos pricing policy in a just-in-time envi-ronmentrdquo Computers and Operations Research vol 27 no 14pp 1357ndash1373 2000
[6] P C Yang ldquoPricing strategy for deteriorating items usingquantity discount when demand is price sensitiverdquo EuropeanJournal of Operational Research vol 157 no 2 pp 389ndash3972004
[7] J-F Tsai ldquoAn optimization approach for supply chain manage-ment models with quantity discount policyrdquo European Journalof Operational Research vol 177 no 2 pp 982ndash994 2007
[8] B L Foote ldquoOn the implementation of a control-basedforecasting system for aircraft spare parts procurementrdquo IIETransactions vol 27 no 2 pp 210ndash216 1995
[9] A A Ghobbar and C H Friend ldquoEvaluation of forecastingmethods for intermittent parts demand in the field of aviation apredictive modelrdquo Computers and Operations Research vol 30no 14 pp 2097ndash2114 2003
[10] F-L Chu ldquoForecasting tourism demand a cubic polynomialapproachrdquo Tourism Management vol 25 no 2 pp 209ndash2182004
[11] X Zhao J Xie and J Leung ldquoThe impact of forecasting modelselection on the value of information sharing in a supply chainrdquoEuropean Journal of Operational Research vol 142 no 2 pp321ndash344 2002
[12] H L Lee V Padmanabhan and SWhang ldquoThe bullwhip effectin supply chainsrdquo Sloan Management Review vol 38 no 3 pp93ndash102 1997
[13] F Chen Z Drezner J K Ryan and D Simchi-Levi ldquoQuantify-ing the bullwhip effect in a simple supply chain the impact offorecasting lead times and informationrdquoManagement Sciencevol 46 no 3 pp 436ndash443 2000
[14] R J Kuo ldquoSales forecasting system based on fuzzy neuralnetwork with initial weights generated by genetic algorithmrdquoEuropean Journal of Operational Research vol 129 no 3 pp496ndash517 2001
[15] F B Gorucu P U Geris and F Gumrah ldquoArtificial neuralnetwork modeling for forecasting gas consumptionrdquo EnergySources vol 26 no 3 pp 299ndash307 2004
[16] H C Chen H M Wee and Y H Hsieh ldquoOptimal supplychain inventory decision using artificial neural networkrdquo inProceedings of the WRI Global Congress on Intelligent Systems(GCIS rsquo09) pp 130ndash134 May 2009
[17] B Bilgen ldquoApplication of fuzzy mathematical programmingapproach to the production allocation and distribution supplychain network problemrdquo Expert Systems with Applications vol37 no 6 pp 4488ndash4495 2010
[18] C R Moberg B D Cutler A Gross and T W Speh ldquoIdentify-ing antecedents of information exchange within supply chainsrdquoInternational Journal of Physical Distribution and LogisticsManagement vol 32 no 9 pp 755ndash770 2002
[19] S Li and B Lin ldquoAccessing information sharing and informa-tion quality in supply chain managementrdquo Decision SupportSystems vol 42 no 3 pp 1641ndash1656 2006
[20] F-R Lin S-H Huang and S-C Lin ldquoEffects of informationsharing on supply chain performance in electronic commercerdquoIEEE Transactions on Engineering Management vol 49 no 3pp 258ndash268 2002
[21] G P Cachon and M Fisher ldquoSupply chain inventory man-agement and the value of shared informationrdquo ManagementScience vol 46 no 8 pp 1032ndash1048 2000
[22] C-C Huang and S-H Lin ldquoSharing knowledge in a supplychain using the semanticwebrdquoExpert SystemswithApplicationsvol 37 no 4 pp 3145ndash3161 2010
[23] M-M Yu S-C Ting and M-C Chen ldquoEvaluating the cross-efficiency of information sharing in supply chainsrdquo ExpertSystems with Applications vol 37 no 4 pp 2891ndash2897 2010
[24] D Trefler ldquoTrade liberalization and the theory of endogenousprotection an econometric study of US import policyrdquo Journalof Political Economy vol 101 no 1 pp 138ndash160 1993
[25] M S Iman and A Nagata ldquoLiberalization policy over foreigndirect investment and the promotion of local firms developmentin Indonesiardquo Technology in Society vol 27 no 3 pp 399ndash4112005
[26] B Romagnoli V Menna N Gruppioni and C BergaminildquoAflatoxins in spices aromatic herbs herb-teas and medicinalplants marketed in Italyrdquo Food Control vol 18 no 6 pp 697ndash701 2007
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
14 Journal of Optimization
[27] R D C Israel ldquoA comparative welfare analysis of the duty draw-back and the common bonded warehouse schemesrdquo PhilippineReview of Economics vol 30 no 2 1993
[28] B Yang ldquoPolitical democratization economic liberalizationand growth volatilityrdquo Journal of Comparative Economics vol39 no 2 pp 245ndash259 2011
[29] C-S Yu andH-L Li ldquoRobust optimizationmodel for stochasticlogistic problemsrdquo International Journal of Production Eco-nomics vol 64 no 1 pp 385ndash397 2000
[30] LINGO Release 8 Lindo System Chicago Ill USA 2002[31] H Kantz T Schreiber and R S Mackay Nonlinear Time Series
Analysis Cambridge University Press Cambridge UK 1997[32] T Schreiber ldquoInterdisciplinary application of nonlinear time
series methodsrdquo Physics Report vol 308 no 1 pp 1ndash64 1999[33] H L Li Supply Chain Management and Decision Making
Nonlinear Models of Supply Chain chapter 4 2004[34] D A Babayev ldquoPiece-wise linear approximation of functions of
two variablesrdquo Journal of Heuristics vol 2 no 4 pp 313ndash3201997
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of
Submit your manuscripts athttpwwwhindawicom
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical Problems in Engineering
Hindawi Publishing Corporationhttpwwwhindawicom
Differential EquationsInternational Journal of
Volume 2014
Applied MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Probability and StatisticsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Mathematical PhysicsAdvances in
Complex AnalysisJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
OptimizationJournal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
CombinatoricsHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Operations ResearchAdvances in
Journal of
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Function Spaces
Abstract and Applied AnalysisHindawi Publishing Corporationhttpwwwhindawicom Volume 2014
International Journal of Mathematics and Mathematical Sciences
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
The Scientific World JournalHindawi Publishing Corporation httpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Algebra
Discrete Dynamics in Nature and Society
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Decision SciencesAdvances in
Discrete MathematicsJournal of
Hindawi Publishing Corporationhttpwwwhindawicom
Volume 2014 Hindawi Publishing Corporationhttpwwwhindawicom Volume 2014
Stochastic AnalysisInternational Journal of