Essays in quality and supply chain management
Abstract
This thesis contains quantitative models to aid managerial decision making in various aspects of manufacturing operations. The first essay deals with the economic design of multivariate statistical quality control charts, which help users respond quickly to sudden changes in the manufacturing process characteristics. The use of a system of univariate charts is a simple and effective way to monitor the means of multiple correlated quality characteristics. A cost minimization model to design a system of X-bar charts is formulated and solved. This section also includes new computer algorithms to compute the percentage points of a multivariate normal distribution in several cases. The second essay incorporates the effect of supply quality into the quality improvement strategy of the manufacturer. The main subject of interest is the evolution of the product quality level over time. It is assumed that the imperfection levels of the manufacturer and supplier processes continuously decrease according to the associated learning curve characteristics, and in addition, by investing in process improvement, the improvements in quality can be accelerated. The model facilitates the analysis of manufacturer-supplier relations from a quality cost standpoint. It is found that a myopic approach to maximize the quality cost reductions in the short run is not always consistent with the best investment plan under a long-term perspective. The basic model can also be used to explore other issues arising in supply chain management, such as supplier selection, and long-run versus short-run relationships. The third essay studies the inventory decisions in a supplier-manufacturer-consumer chain in the presence of uncertain demand for the product in the consumer market. A multi-period capacity reservation contract between a manufacturer and a long term supplier is designed to establish a stronger supply chain partnership. By providing the manufacturer with the option of sourcing from the spot market, the effect of market forces is incorporated into the capacity reservation contract negotiations. The optimal decision policies of the two parties under Stackelberg equilibrium are derived. It is shown that inclusion of the spot market in the manufacturer's procurement plan significantly reduces the capacity commitments from the long-term supplier.
Degree
Ph.D.
Advisors
Moskowitz, Purdue University.
Subject Area
Management
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