Prof. Jan Fransoo, PhD

Publications

Professor for Operations Management and Logistics

Dean of Research

Publications

Journal Articles (Peer-Reviewed)

Copy reference link   DOI: 10.1007/s10696-017-9301-y

Abstract: Today, climate change is the greatest challenge for future generations. In particular, logistics is perceived as a key sector to contribute to sustainable development meeting the future generations’ needs in terms of low greenhouse gas emissions in a socially and economically responsible way. Green logistics involves all attempts to reduce the ecological impact of peoples’ mobility, traffic systems and of transport in regional and global supply chains including the reverse flow of products and materials.The primary objective of this special issue is to reflect the sustainable development of logistics from various perspectives preferably in an integrated and holistic approach and to examine research issues concerned with quantitative analysis and decision support for supply network design, freight transport and logistics infrastructure. For this special issue eight papers from 36 submissions have been selected for publication after a thorough peer-review according to the standards of the FSM journal.

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Copy reference link   DOI: 10.1007/s10111-017-0443-1

Abstract: Objective: To characterize how schedulers spend their time interacting with external parties.Background: Time is the most critical resource at the disposal of schedulers; however its usage has been overlooked by prior empirical studies. Methods: Seven schedulers for a total of nineteen 8-hour shifts where observed. Detailed time data about their activities and how these where interrupted was collected. Results: Schedulers interrupt themselves significantly and most of their activities are triggered externally. Despite this, schedulers are able to decide in most situations which activity to perform next. Schedulers spend more time on their informational role than on their decisional role; mostly at the requests of others, suggesting insufficient information system support to others in the organization.Conclusion: Schedulers other main role, besides making scheduling related decisions is to relay information. This implies that schedulers are subject to several external requests for activities. However, due to asynchronous communication that e-mails provide, they are still able to decide on their own schedule to do tasks.Application: The methodology used can be used to evaluate an individual use of time, in particular for time-critical such as scheduling. The analysis may provide insights as to how to improve the efficiency of such jobs.

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Copy reference link   DOI: 10.1016/j.ejor.2017.11.030

Abstract: We model a periodic review inventory system with non-stationary stochastic demand, in which a manufacturer is procuring a component from two available supply sources. The faster supply source is modeled as stochastic capacitated with immediate delivery, while the slower supply source is modeled as uncapacitated with a longer fixed lead time. The manufacturer’s objective is to choose how the order should be split between the two supply sources in each period, where the slower supply source is used to compensate for the supply capacity unavailability of the faster supply source. This is different from the conventional dual-sourcing problem, and motivated by the new reality of near-shoring options. We derive the optimal dynamic programming formulation that minimizes the total expected inventory holding and backorder costs over a finite planning horizon and show that the optimal policy is relatively complex. We extend our study by developing an extended myopic two-level base-stock policy and we show numerically that it provides a very close estimate of the optimal costs. Numerical results reveal the benefits of dual-sourcing under near-shoring, where we point out that in most cases the manufacturer should develop a hybrid procurement strategy, taking advantage of both supply sources to minimize its expected total cost.

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Copy reference link   DOI: 10.1016/j.ejor.2017.09.014

Abstract: In large cities in emerging economies, traditional retail is present in a very high density, with multiple independently owned small stores in each city block. Consequently, when faced with a stockout, consumers may not only substitute with a different product in the same store, but also switch to a neighboring store. Suppliers may take advantage of this behavior by strategically supplying these stores in a coherent manner. We study this problem using consumer choice models. We build two consumer choice models for this consumer behavior. First, we build a Nested Logit model for the consumer choice process, where the consumer chooses the store on the first level and selects the product on the second level. Then, we consider an Exogenous Substitution model. In both models, a consumer may substitute at either the store level or the product level. Furthermore, we estimate the parameters of the two models using Markov chain Monte Carlo algorithm in a Bayesian manner. We numerically find that the Nested Logit model outperforms the Exogenous Substitution model in estimating substitution probabilities. Further, the information on consumers’ purchase records helps improve the estimation accuracies of both the first-choice probabilities and the substitution probabilities when the beginning inventory level is low. Finally, we show that explicitly including such substitution behavior in the inventory optimization process can significantly increase the expected profit.

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Copy reference link   DOI: 10.1016/j.cor.2017.06.015

Abstract: Tempelmeier and Hilger (2015) study the stochastic dynamic lot sizing problem with multiple items and limited capacity. They propose a linear optimization formulation for the problem based on a piece-wise linear approximation of the non-linear functions for the expected backorders and the expected inventory on hand. Building on the work of Tempelmeier and Hilger (2015), we correct an erroneous derivation of the linear optimization problem and propose an improved model.

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Copy reference link   DOI: 10.1016/j.trb.2018.02.007

Abstract: In this paper, we study a hinterland empty container transportation system<br/>which consists of a sea container terminal and an inland container terminal. There are a hinterland container operator who is in charge of the hinterland container transportation and an ocean carrier who has an empty container depot at the sea container terminal. We utilize a two-stage game model to describe the ocean carrier’s decision about the container’s free detention time and the hinterland container operator’s decision about the time when should an arrived empty container at the inland terminal be dispatched to the sea terminal. Optimal delivery policy of the empty container and the ocean carrier’s optimal free detention time are derived. It is shown that the decentralized system does not guarantee system coordination all the time. The ocean carrier has incentive to integrate the hinterland transportation operation only if the hinterland area is not very short of empty containers.

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Copy reference link   DOI: 10.1287/opre.2017.1616

Abstract: Many seasonal products are transported via ocean carriers from origin to destination markets. The shipments arriving earlier in the market may sell at higher prices, but faster shipping services can be costly. In this paper, we study a newsvendor-type shipper who transports and sells seasonal products to an overseas market, where the selling price declines over time. A set of vessels with different schedules and freight rates are available to choose from. Our analysis demonstrates that a portfolio of vessels has two distinct effects on mitigating uncertainties in both demand and vessels’ arrival schedules, while these two portfolio effects have been previously understood as separate issues in the literature. To find the optimal portfolio in our problem,we first show that when vessels arrive in a deterministic sequence, the optimal portfolio can either be derived in closed form (in the single-demand setting) or computed efficiently with a variation of the shortest-path algorithm (in the multi-demand setting). Then, based on these results, we propose an approximation procedure to address the general problem with an uncertain arrival sequence. In each iteration of the procedure, we only need to minimize a cost function approximated by a deterministic arrival schedule and the portfolio generated can converge to the optimal one under mild conditions. Finally, we present a real-world case studyto demonstrate several practical implications of managing a carrier portfolio.

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Copy reference link   DOI: 10.1080/24725854.2017.1325026

Abstract: It has long been recognized that the bullwhip effect in real life depends on a behavioral component. However, non-experimental research typically considers only structural causes in its analysis. In this paper, we study the impact of behavioral biases on the performance of inventory/production systems modeled through an APVIOBPCS (Automatic Pipeline, Variable Inventory, Order Based Production Control System) design using linear control theory. To explicitly model managerial behavior, we allow independent adjustments to inventory and pipeline feedback loops. We consider the biases of smoothing/over-reaction to inventory and pipeline mismatches, and the under/over-estimation of the pipeline. To quantify the performance of the system, we first develop a new procedure to determine the exact stability region of the system and we derive an asymptotic stability region that is independent of the lead time. Afterwards, we analyze the effect of different demand signals on order and inventory variations. Our findings suggest that normative policy recommendations must take demand structure explicitly into account. Finally, through extensive numerical experiments, we find that the performance of the system depends on the combination of the behavioral biases and the structure of the demand stream.

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Copy reference link   DOI: 10.1016/j.trd.2017.08.016

Abstract: This article studies the allocation of CO2 emissions to a specific shipment in routing transportation. The authors show that this problem differs from a cost allocation problem specifically because the concavity condition does not hold necessarily in the CO2 allocation problem. This implies that a traditional cost allocation method cannot be straightforwardly translated into a CO2 allocation problem, and thus, new methods need to be developed. This study proposes four allocation mechanisms that are extensions from the literature and the common practice in industries. In doing so, the authors introduce the concept of carbon efficiency to assess if a particular allocation rule drives companies to carbon emissions reduction. They present analytical properties that show that the current practice of allocating CO2 emissions based on the greenhouse gas protocol, fails to be sensitive to drive companies to the sustainable practice of placing consolidated orders. The authors also conduct an experimental analysis using data of a logistics service provider that operates in Europe. Using the results of the experiments, they show that simple allocation methods can lead to a fair and carbon efficient allocation. In addition, the study provides insights by conducting a sensitivity analysis, and it shows that the CO2 allocations are not substantially susceptible to shipment size estimation errors.

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Copy reference link   DOI: 10.1016/j.compchemeng.2016.08.011

Abstract: In this work, we develop a mixed integer linear optimization model that can be used to select appropriate sources, capture technologies, transportation network and CO2 storage sites and optimize for a minimum overall cost for a nationwide CO2 emission reduction in the Netherlands. Five different scenarios are formulated by varying the location of source and storage sites available in the Netherlands. The results show that the minimum overall cost of all scenarios is €47.8 billion for 25 years of operation and 54 Mtpa capture of CO2. Based on the investigated technologies, this work identifies Pressure Swing Adsorption (PSA) as the most efficient for post-combustion CO2 capture in the Netherlands. The foremost outcome of this study is that the capture and compression is the dominant force contributing to a majority of the cost.KeywordsCarbon capture; CO2 reduction; Supply chain; Optimization; CCS; Mathematical model

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Copy reference link   DOI: 10.1016/j.trb.2016.10.005

Abstract: We study the strategic problem of a logistics service provider managing a (possibly heterogeneous) fleet of vehicles to serve a city in the presence of access restrictions. We model the problem as an area partitioning problem in which a rectangular service area has to be divided into sectors, each served by a single vehicle. The length of the routes, which depends on the dimension of the sectors and on customer density in the area, is calculated using a continuous approximation. The aim is to partition the area and to determine the type of vehicles to use in order to minimize the sum of ownership or leasing, transportation and labor costs. We formulate the problem as a mixed integer linear problem and as a dynamic program. We develop efficient algorithms to obtain an optimal solution and present some structural properties regarding the optimal partition of the service area and the set of vehicle types to use. We also derive some interesting insights, namely we show that in some cases traffic restrictions may actually increase the number of vehicles on the streets, and we study the benefits of operating a heterogeneous fleet of vehicles.

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Copy reference link   DOI: 10.1007/s00291-016-0471-x

Abstract: We consider an original equipment manufacturer (OEM) who has outsourced the production activities to a contract manufacturer (CM). The CM produces for multiple OEMs on the same capacitated production line. The CM requires that all OEMs reserve capacity slots before ordering and responds to these reservations by acceptance or partial rejection, based on allocation rules that are unknown to the OEM. Therefore, the allocated capacity for the OEM is not known in advance, also because the OEM has no information about the reservations of the other OEMs. Based on a real-life situation, we study this problem from the OEM’s perspective who faces stochastic demand and stochastic capacity allocation from the contract manufacturer. We model this problem as a single-item, periodic review inventory system, and we assume linear inventory holding, backorder, and reservation costs. We develop a stochastic dynamic programming model, and we characterize the optimal policy. We conduct a numerical study where we also consider the case that the capacity allocation is dependent on the demand distribution. The results show that the optimal reservation policy is little sensitive to the uncertainty of capacity allocation. In that case, the optimal reservation quantities hardly increase, but the optimal policy suggests increasing the utilization of the allocated capacity. Further, in comparison with a static policy, we show that a dynamic reservation policy is particularly useful when backorder cost and uncertainty are low. Moreover, we show that for the contract manufacturer, to achieve the desired behavior, charging little reservation costs is sufficient.

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Copy reference link   DOI: 10.1186/s41072-016-0008-0

Abstract: In recent years, there has been significant interest in the development of connectivity indicators for ports. For short sea shipping, especially in Europe, Roll-on Roll-off (RoRo) shipping is almost equally important as container shipping. In contrast with container shipping, RoRo shipments are primarily direct, thus the measurement of its connectivity requires a different methodology. In this paper, we present a methodology for measuring the RoRo connectivity of ports and illustrate its use through an application to European RoRo shipping. We apply the methodology on data collected from 23 different RoRo shipping service providers concerning 620 unique routes connecting 148 ports. We characterize the connectivity of the ports in our sample and analyze the results. We show that in terms of RoRo connectivity, neither the number of links nor the link quality (frequency, number of competing providers, minimum number of indirect stops) strictly dominate the results of our proposed indicator. The highest ranking ports combine link quality and number. Finally, we highlight promising areas for future research based on the insights obtained.

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Copy reference link   DOI: 10.1007/s10696-016-9240-z

Abstract: This article applies multiobjective optimization to show how the tradeoffs between cost and carbon emissions may be obtained in the context of sustainable operations. We formulate a model where transportation mode selection and order quantity decisions are considered jointly. We derive structural properties of the model and develop several insights. First, we show that switching to a greener mode of transportation while continuing to optimize the total logistics costs function may lead to a dominated solution. Second, we prove that the modal shift occurs only under strong carbon emissions reduction requirements. Third, we show that the efficient frontier is non-convex and we analyze some implications. Finally, we analyze the impacts of an increase in truck capacity. The results are illustrated through an example of a French retailer.

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Copy reference link   DOI: 10.1111/tesg.12152

Abstract: Although anecdotal evidence suggests that co-location can bring about several benefits for co-located logistics companies, implying the need to incorporate such considerations in location decisions, these benefits have hardly been analysed empirically. This paper provides detailed insights for decision making by precisely analysing the synergies attained through the co-location of logistics firms in specialised and diverse logistics concentration areas. The paper analyses whether co-location in logistics concentration areas that specialise in fresh produce provides additional benefits over co-location in diverse logistics concentration areas that do not specialise in any particular type of products. A survey of managers of 127 logistics firms located in logistics concentration areas tested for differences in synergies through co-location in specialised versus diverse logistics concentration areas. Logistics firms co-located in fresh produce logistics parks share knowledge, combine transport and storage capacities, and trade products more than logistics firms co-located in diverse logistics concentration areas.

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Copy reference link   DOI: 10.1016/j.trd.2015.12.009

Abstract: Transportation CO2 emissions are expected to increase in the following decades, and thus, new and better alternatives to reduce emissions are needed. Road transport emissions are explained by different factors, such as the type of vehicle, delivery operation and driving style. Because different cities may have conditions that are characterized by diversity in landforms, congestion, driving styles, etc., the importance of assigning the proper vehicle to serve a particular region within the city provides alternatives to reduce CO2 emissions. In this article, we propose a new methodology that results in assigning trucks to deliver in areas such that the CO2 emissions are minimized. Our methodology clusters the delivery areas based on the performance of the vehicle fleet by using the k-means algorithm and Tukey’s method. The output is then used to define the optimal CO2 truck-area assignment. We illustrate the proposed approach for a parcel company that operates in Mexico City and demonstrate that it is a practical alternative to reduce transportation CO2 emissions by matching vehicle type with delivery areas.

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Copy reference link   DOI: 10.1016/j.tranpol.2015.06.007

Abstract: This article is to shed light on the interactions among the various freight distribution constructs such as regulations, collaboration, detour, load/unload interfaces and logistical performance. The proposed model is empirically tested using Partial Least Squares with 119 freight operators. The findings reveal the moderating effect of regulations (negative effect) on the positive relationship between collaboration and load/unload interfaces regarding receivers and freight operators. According to the effects shown by our model, regulation, along with lack of collaboration, appear to be the Achilles’ heel of freight distributors, in that both factors contribute (directly and indirectly) to detour, which results in less efficient logistical performance.

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Copy reference link   DOI: 10.1016/j.jtrangeo.2015.05.007

Abstract: We analyse the opinions of shippers, logistic service providers (LSPs) and carriers related to regulations and issues faced by these companies regarding freight distribution in megacities, and the logistical performance measures likely affected by those regulations and issues. We present a review of the freight distribution literature focusing on a large number of freight distribution aspects, such as regulatory, collaborative, environmental, logistical and risk. We also investigate some logistical performance indicators adopted by the companies. Subsequently, we conduct a survey with 147 companies working in the São Paulo Metropolitan Region (SPMR). We use multivariate analysis of variance to assess the logistical performance indicators and non-linear canonical correlation analysis to identify the most relevant freight distribution attributes. The results that the majority of carriers are located inside the SPMR and efficiently handle these issues better than others actors. The lack of collaboration, cargo theft, traffic congestion and some regulations affect the LSP’s logistical performance. Moreover, the actors perceive regulatory aspects, mainly traffic congestion, and a lack of security for deliveries in unsafe areas as the significant issues for deliveries in megacities.

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Copy reference link   DOI: 10.1016/j.ejor.2014.10.052

Abstract: Reverse factoring –a financial arrangement where a corporation facilitates early payment of its trade credit obligations to suppliers– is increasingly popular in industry. Many firms use the scheme to induce their suppliers to grant them more lenient payment terms. By means of a periodic review base stock model that includes alternative sources of financing, we explore the following question: what extensions of payment terms allow the supplier to benefit from reverse factoring? We obtain solutions by means of simulation optimization. We find that an extension of payment terms induces a non-linear financing cost for the supplier, beyond the opportunity cost of carrying additional receivables. Furthermore, we find that the size of the payment term extension that a supplier can accommodate depends on demand uncertainty and the cost structure of the supplier. Overall, our results show that the financial implications of an extension of payment terms needs careful assessment in stochastic settings.

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Copy reference link   DOI: 10.1016/j.ijpe.2014.11.017

Abstract: Intermodal transportation is often presented as an efficient solution for reducing carbon emissions without compromising economic growth. In this article, we present a new intermodal network design model in which both the terminal location and the allocation between direct truck transportation and intermodal transportation are optimized. This model allows for studying the dynamics of intermodal transportation solutions in the context of hinterland networks from a cost, carbon emissions and modal shift perspective. We show that maximizing the modal shift is harmful for both cost and carbon emissions and that there is a carbon optimal level of modal shift. We also show that even if transportation cost and carbon emissions share the same structure, these two objectives lead to different solutions and that the terminal is located closer to the port when optimizing cost and further away when optimizing carbon emissions. The model also allows for studying the tradeoff between distance and volume, the impact of using aggregated models for estimating train transportation cost and carbon emissions as well as the potential policy measures that enable aligning cost and carbon emissions.

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Copy reference link   DOI: 10.1016/j.ijpe.2014.09.008

Abstract: In this paper we analyze the strong sales dip observed in the manufacturing industry at the end of 2008, following the bankruptcy of Lehman Brothers and the subsequent collapse of the financial world. We suggest that firms¿ desire to retain liquidity during these times prompted a reaction characterized by the reduction of working capital, which materialized as a synchronized reduction in target inventory levels across industries. We hypothesize that such a reaction effectively acted as an endogenous shock to supply chains, ultimately resulting in the bullwhip-effect kind of demand dynamics observed. To test this proposition we develop a system dynamics model that explicitly takes into account structural, operational, and behavioral parameters of supply chains aggregated at an echelon level. We calibrate the model for use in 4 different business units of a major chemical company in the Netherlands, all situated 4–5 levels upstream from consumer demands in their respective supply chains. We show that the model gives a very good historical fit of the sales developments during the period following the Lehman collapse. We test the model¿s robustness to behavioral parameter estimation errors through sensitivity analysis, and the de-stocking hypothesis against an alternative model. Finally, we observe that the empirical data is aligned with experimental observations regarding human behavioral mechanisms concerning target adjustment times.

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Copy reference link   DOI: 10.1016/j.ijpe.2014.09.015

Abstract: We study the inventory control problem of a retailer working under stochastic demand and stochastic limited supply. We assume that the unfilled part of the retailer¿s order is fully backordered at the supplier and replenished with certainty in the following period. As it may not always be optimal for the retailer to replenish the backordered supply, we also consider the setting in which the retailer has a right to either partially or fully cancel these backorders, if desired. We show the optimality of the base-stock policy and characterize the threshold inventory position above which it is optimal to fully cancel the replenishment of the backordered supply. We carry out a numerical analysis to quantify the benefits of supply backordering and the value of the cancelation option, and reveal several managerial insights.

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Copy reference link   DOI: 10.1016/j.dss.2015.08.001

Abstract: In this paper, we present a DSS that generates schedules for the transportation of containers by barge in the hinterland, in particular from sea terminals to an inland terminal. As a case study, we propose the transportation from the Ports of Rotterdam and Antwerp to a terminal in the south of the Netherlands, where the problem is typical. This problem is modeled as a heterogeneous fleet vehicle routing problem. The main decision is based on the trade-off of either consolidating containers to generate economies of scale with barges or alternatively dispatch, expensively and quickly, single containers by truck. The DSS is flexible as it can be applied to different settings by properly tuning the several parameters in the model. With numerical experiments, based on real world data, we evaluate the effectiveness of this system and its applicability.

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Copy reference link   DOI: 10.1007/s10696-013-9189-0

Abstract: In almost all industries companies are confronted with the sustainability challenge induced by climate change, end of fossil fuel and scarcity of natural resources, just to name a few. In general, sustainability management—the so-called triple bottom line—seeks to balance the economic, social and environmental performance (e.g. CO2, waste, or resource consumption). Traditionally, the development of supply chains is driven by measures like costs and customer service. More recently, in view of the sustainability challenge environmental issues are increasingly taken into consideration, for instance, by adding environmental constraints to supply chain models or by considering carbon taxes and emission trading schemes or by including the effect of green house gas emissions in the choice of the transportation mode. This naturally leads to multi-objective considerations in order to analyze the trade-off between economic and environmental performance measures. The primary objective of this special issue is to reflect the recent developments in sustainability management in supply chains and related transport systems and to examine research issues concerned with quantitative and other modeling techniques to improve the environmental performance of supply chains in industry. For this special issue twelve papers have been selected for publication after a thorough peerreview according to the standards of the FSM journal.

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Copy reference link   DOI: 10.1007/s10696-012-9170-3

Abstract: A variety of activity-based methods exist for estimating the carbon footprint in transportation. For instance, the greenhouse gas protocol suggests a more aggregate estimation method than the Network for Transport and Environment (NTM) method. In this study, we implement a detailed estimation method based on NTM and different aggregate approaches for transportation carbon emissions in the dynamic lot sizing model. Analytical results show the limitations of aggregate models for both accurate estimation of real emissions and risks of compliance with carbon constraints (e.g., carbon caps). Extensive numerical experimentation shows that the magnitude of errors can be substantial. We provide insights under which limited conditions aggregate estimations can be used safely and when more detailed estimates are appropriate.

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