By a News Reporter-Staff News Editor at Computer Weekly News -- Research findings on Industrial Engineering are discussed in a new report. According to news originating from East Lansing, Michigan, by VerticalNews correspondents, research stated, "Decision support tools are increasingly used in operations where key decision inputs such as demand, quality, or costs are uncertain. Often such uncertainties are modeled with probability distributions, but very little attention is given to the shape of the distributions."
Our news journalists obtained a quote from the research from Michigan State University, "For example, state-of-the-art planning systems have weak, if any, capabilities to account for the distribution shape. We consider demand uncertainties of different shapes and show that the shape can considerably change the optimal decision recommendations of decision models. Inspired by discussions with a leading consumer electronics manufacturer, we analyze how four plausible demand distributions affect three representative decision models that can be employed in support of inventory management, supply contract selection and capacity planning decisions. It is found, for example, that in supply contracts flexibility is much more appreciated if demand is negatively skewed, i.e., has downside potential, compared to positively skewed demand. We then analyze the value of distributional information in the light of these models to find out how the scope of improvement actions that aim to decrease demand uncertainty vary depending on the decision to be made."
According to the news editors, the research concluded: "Based on the results, we present guidelines for effective utilization of probability distributions in decision models for operations management."
For more information on this research see: Impact of the shape of demand distribution in decision models for operations management. Computers in Industry, 2013;64(7):765-775. Computers in Industry can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Computers in Industry - www.elsevier.com/wps/product/cws_home/505646)
The news correspondents report that additional information may be obtained from A. Kaki, Michigan State University, Dept. of Supply Chain Management, Eli Broad Coll Business, East Lansing, MI 48824, United States. Additional authors for this research include A. Salo and S. Talluri.
Keywords for this news article include: Michigan, East Lansing, United States, Industrial Engineering, North and Central America
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