Methods of risk pooling in business logistics and their application [Elektronische Ressource] / von Gerald Oeser
266 Pages
English

Methods of risk pooling in business logistics and their application [Elektronische Ressource] / von Gerald Oeser

-

Downloading requires you to have access to the YouScribe library
Learn all about the services we offer

Description

Methods of Risk Pooling in Business Logistics and Their Application I n a u g u r a l d i s s e r t a t i o n zur Erlangung des akademischen Grades „Doktor der Wirtschaftswissenschaften“ (Dr. rer. pol.) eingereicht an der Wirtschaftswissenschaftlichen Fakultät der Europa-Universität Viadrina in Frankfurt (Oder) im September 2010 von Gerald Oeser Frankfurt (Oder) “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.” John Allen Paulos, Professor of Mathematics at Temple University in Philadelphia To my brother, who never failed to support me Acknowledgements First and foremost I would like to express my gratitude to my Ph.D. advisor Prof. Dr. Dr. h.c. Knut Richter, Chair of General Business Administration, especially Industrial Management, European University Viadrina Frankfurt (Oder), Germany for his extensive mentoring. He also kindly gave me the opportunity of gaining experience in teaching grad-uate courses in addition to my research. For willingly delivering his expert opinion on my thesis as the second referee I thank Prof. Dr. Joachim Käschel, Professorship of Production and Industrial Management, Tech-nical University Chemnitz, Germany very much. I would also like to gratefully acknowledge the support of all employees of Prof. Rich-ter's chair, especially Dr.

Subjects

Informations

Published by
Published 01 January 2011
Reads 19
Language English
Document size 4 MB







Methods of Risk Pooling in Business Logistics
and Their Application




I n a u g u r a l d i s s e r t a t i o n




zur Erlangung des akademischen Grades
„Doktor der Wirtschaftswissenschaften“
(Dr. rer. pol.)






eingereicht an der

Wirtschaftswissenschaftlichen Fakultät
der Europa-Universität Viadrina
in Frankfurt (Oder)
im September 2010




von


Gerald Oeser
Frankfurt (Oder)



“Uncertainty is the only certainty there is,
and knowing how to live with insecurity is the only security.”

John Allen Paulos,
Professor of Mathematics at Temple University in Philadelphia


To my brother,
who never failed to support me

Acknowledgements
First and foremost I would like to express my gratitude to my Ph.D. advisor Prof. Dr.
Dr. h.c. Knut Richter, Chair of General Business Administration, especially Industrial
Management, European University Viadrina Frankfurt (Oder), Germany for his extensive
mentoring. He also kindly gave me the opportunity of gaining experience in teaching grad-
uate courses in addition to my research.
For willingly delivering his expert opinion on my thesis as the second referee I thank
Prof. Dr. Joachim Käschel, Professorship of Production and Industrial Management, Tech-
nical University Chemnitz, Germany very much.
I would also like to gratefully acknowledge the support of all employees of Prof. Rich-
ter's chair, especially Dr. Grigory Pishchulov: Among other things, he helped me carry out
the “Subadditivity Proof for the Order Quantity Function (5.1)” in Appendix E mathemati-
cally formally correctly.
Furthermore, I thank Prof. Dr. Dr. h.c. Werner Delfmann, Director of the Department of
Business Policy and Logistics, University of Cologne, Germany for the opportunity offered
and for showing me that the world cannot be explained by mathematics alone.
Moreover, I appreciate the diverse support of the following professors during my Mas-
ter's and doctoral studies: Ravi M. Anupindi (University of Michigan), Ronald H. Ballou
(Case Western Reserve University), Gérard Cachon (University of Pennsylvania), Ian
Caddy (University of Western Sydney, Australia), Sunil Chopra (Northwestern Universi-
ty), Chandrasekhar Das (emeritus, University of Northern Iowa), David Dilts (Oregon
Health and Science University), Bruno Durand (University of Nantes, France), Philip T.
Evers (University of Maryland), Amit Eynan (University of Richmond), Dieter Feige
(emeritus, University of Nuremberg, Germany), Jaime Alonso Gomez (EGADE - Tec de
Monterrey, Mexico City and University of San Diego), Drummond Kahn (University of
Oregon), Peter Köchel (emeritus, Technical University Chemnitz, Germany), David H.
Maister (formerly Harvard Business School), Alan C. McKinnon (Heriot-Watt University,
UK), Esmail Mohebbi (University of West Florida), Steven Nahmias (Santa Clara Univer-
sity), Teofilo Ozuna, Jr. (The University of Texas-Pan American), David F. Pyke (Univer-
sity of San Diego), Pietro Romano (University of Udine, Italy), Wolfgang Schmid (Euro-
pean University Viadrina Frankfurt (Oder), Germany), Yossi Sheffi (Massachusetts Insti-
tute of Technology), Edward Silver (emeritus, University of Calgary, Canada), Jacky Yuk-
Chow So (University of Macau, China), Jayashankar M. Swaminathan (University of

North Carolina), Christian Terwiesch (University of Pennsylvania), Ulrich Thonemann
(University of Cologne, Germany), Biao Yang (University of York, UK), and Walter Zinn
(The Ohio State University).
I express gratitude to the paper merchant wholesaler Papierco for the insight into its op-
erations, the opportunity of optimizing its logistics, and the financial support.
I am also thankful to my friends: Without them writing this dissertation would have
been a lonesome experience.
Finally, I thank my father for constantly pushing and financially supporting me and
proofreading my thesis.

Geleitwort
Die vorgelegte Dissertation widmet sich dem großen Thema Risk Pooling in der Business-
Logistik. Die Aggregation von Risiken der Logistikprozesse ist ein derart universelles
Problem, so dass Autoren verschiedenster Wissenschafts- und Anwendungsgebiete dazu
ihre Positionen, Lösungsansätze und Modelle dargestellt haben. Bisher hatte noch niemand
den Mut aufgebracht, diese kaum überblickbare Menge an Literaturquellen zu sichten und
nach wissenschaftlichen Kriterien zu ordnen. Herr Oeser hat sich dieser Aufgabe gestellt
und hat sie mit Bravour gemeistert.
Bei aller Bedeutung dieser aufwendigen akademischen Aktivitäten darf jedoch nicht ver-
gessen werden, dass Risk Pooling ein Problem der Praxis ist, und dass die entsprechenden
theoretischen Untersuchungen letztendlich der Praxis dienen sollen. Die Vielfältigkeit des
Problems kann dabei kaum durch ein relevantes Basismodell erfasst werden. Es ist das
Verdienst des Autors, mit der Entwicklung einer Grundkonzeption für ein Entscheidungs-
unterstützungssystem zur Auswahl der geeigneten Risk Pooling Strategien Unternehmen
und besonders Unternehmensberatungen ein Instrument in die Hand zu geben, mit dem
sich die vielfältigen Situationen der Unternehmen analysieren lassen. Er belässt es jedoch
nicht beim Entwurf der Konzeption, sondern demonstriert auch überzeugend dessen An-
wendung anhand eines Unternehmens.
Es ließen sich viele weitere Vorzüge des hier veröffentlichten Werkes nennen. Es soll an
dieser Stelle jedoch dem Leser überlassen bleiben sich ein Urteil zu bilden. Herr Oeser
bietet dem Leser mit seiner Dissertation auf jeden Fall keine „leichte Kost“, denn der be-
handelte Gegenstand lässt eine oberflächliche Betrachtung nicht zu.
Wer sollte dieses Werk lesen? Wissenschaftler und Studenten aus den Gebieten Operations
Management, Logistik, Operations Research werden hier viel Neues und Interessantes,
auch viele Probleme für die weitere Forschung finden. Unternehmensberatungen werden
viele angeführte Lösungen zur Komplexitätsbewältigung in ihren Projekten anwenden
können. Ich bin überzeugt, dass die vorgelegte Dissertation neue Forschungen und Projekte
anregen wird. Das ist das Schönste, was sich ein Autor wohl wünschen kann.

Prof. Dr. Dr. h.c. Knut Richter


Table of Contents
List of Figures .................................................................................................................... X
List of Tables ..................................................................................................................... XI
List of Abbreviations, Signs, and Symbols ................................................................... XII
Abstract ................................................................................................................... XIV
1 Introduction ................................................................................................. 1
1.1   Problem: Growing Uncertainty in Business Logistics and
Need for a Tool to Choose Among Risk Pooling Countermeasures ............ 1 
1.2   Objective ....................................................................................................... 3 
1.3   Object and Method ........................................................................................ 3 
1.4   Structure and Contents .................................................................................. 4 
2   Risk Pooling in Business Logistics ............................................................. 6 
2.1   Business Logistics Risk Pooling Research ................................................... 6 
2.2   Placing Risk Pooling in the Supply Chain, Business Logistics,
and a Value Chain ......................................................................................... 8 
2.3 Defining Risk Pooling ................................................................................. 11 
2.4   Explaining Risk Pooling ............................................................................. 14 
2.5   Characteristics of Risk Pooling ................................................................... 19 
3   Methods of Risk Pooling ........................................................................... 24 
3.1   Storage: Inventory Pooling ......................................................................... 27 
3.2   Transportation ............................................................................................. 35 
3.2.1   Virtual Pooling ............................................................................................ 35 
3.2.2   Transshipments ........................................................................................... 35 
3.3   Procurement ................................................................................................ 40 
3.3.1   Centralized Ordering ................................................................................... 40 
3.3.2   Order Splitting 41 
3.4   Production ................................................................................................... 43 
3.4.1   Component Commonality ........................................................................... 43 
3.4.2   Postponement .............................................................................................. 45 
3.4.3   Capacity Pooling ......................................................................................... 49 
VII Table of Contents
3.5   Sales and Distribution ................................................................................. 51 
3.5.1   Product Pooling ........................................................................................... 51 
3.5.2   Product Substitution .................................................................................... 52 
4   Choosing Suitable Risk Pooling Methods ............................................... 53 
4.1   Contingency Theory .................................................................................... 53 
4.2   Conditions Favoring the Individual Risk Pooling Methods ....................... 54 
4.3   The Risk Pooling Methods' Advantages, Disadvantages,
Performance, and Trade-Offs ...................................................................... 55 
4.4   A Risk Pooling Decision Support Tool ...................................................... 56 
5   Applying Risk Pooling at Papierco .......................................................... 74 
5.1   Papierco ....................................................................................................... 74 
5.2   Problems Papierco Faces ............................................................................ 75 
5.2.1   Fierce Competition in German Paper Wholesale ........................................ 75 
5.2.2   Supplier Lead Time Uncertainty ................................................................. 75 
5.2.3   Customer Demand Uncertainty ................................................................... 76 
5.2.4   Distribution Requirements Planning (DRP) ............................................... 80 
5.2.5   Demand Forecasting Methods .................................................................... 82 
5.3   Solving Papierco's Problems ....................................................................... 87 
5.3.1   Determining Suitable Risk Pooling Methods for Papierco ......................... 87 
5.3.2   Emergency Transshipments between Papierco's German Locations .......... 91 
5.3.2.1   Optimizing Catchment Areas ...................................................................... 91 
5.3.2.2   Increase in Transshipments and Its Causes ................................................. 94 
5.3.2.3   Transshipments Are Worthwhile for Papierco ........................................... 96 
5.3.3   Centralized Ordering ................................................................................. 101 
5.3.3.1   Papierco's Current Order Policy ............................................................... 101 
5.3.3.2   Stock-to-Demand Order Policy with Centralized Ordering and
Minimum Order and Saltus Quantities ..................................................... 105 
5.3.3.3   Benefits of Centralized Ordering for Papierco ......................................... 107 
5.3.4   Product Pooling ......................................................................................... 117 
5.3.5   Inventory Pooling ...................................................................................... 118 
5.3.6 Challenges in IT and Organization ........................................................... 121 
5.4 Summary ................................................................................................... 123 
6   Conclusion ............................................................................................... 126 
VIII Table of Contents
Appendix A: A Survey on Risk Pooling Knowledge and Application in
102 German Manufacturing and Trading Companies ........................ 134 
1   Introduction ............................................................................................. 135 
1.1   Motivation: Scarce Survey Research on Risk Pooling ............................. 135 
1.2   Objective ................................................................................................... 140 
2   The Survey ............................................................................................... 142 
2.1   Research Design ........................................................................................ 142 
2.2   Data Analysis and Findings ...................................................................... 147 
2.2.1   Risk Pooling Knowledge and Utilization in
the German Sample Companies ................................................................ 147 
2.2.2   Association between the Knowledge of
Different Risk Pooling Concepts .............................................................. 151 
2.2.3   Association between Knowledge and Utilization of
Risk Pooling Concepts .............................................................................. 154 
2.2.4   Association of the Utilization of Different Risk Pooling Concepts ........... 156 
2.2.5   Risk Pooling Knowledge and Utilization in
the Responding Manufacturing and Trading Companies ......................... 161 
2.2.6   Knowledge and Utilization of the Different Risk Pooling Concepts
in Small and Large Responding Companies ............................................. 164 
3   Critical Appraisal .................................................................................... 166 
4   Questionnaire .......................................................................................... 169 
5   Answers .................................................................................................... 170 
Appendix B: Proof of the Square Root Law for Regular, Safety, and
Total Stock ............................................................................................... 172 
Appendix C: What Causes the Savings in Regular Stock through Centralization
Measured by the SRL? ........................................................................... 176 
Appendix D: Tables ....................................................................................................... 178 
Appendix E: Subadditivity Proof for the Order Quantity Function (5.1) ............... 202 
Bibliography .................................................................................................................... 204 
IX