INVESTIGATORS R. King S. Fang J. Joines H. Nuttle STUDENTS N. Arefi Y. Dai S. Lertworasirikul Industrial Engineering Textiles Engineering, Chem. and Science Industrial Engineering MR. Industrial Engineering Ph.D. Industrial Engineering RESEARCH TEAM

OBJECTIVES Models and tools to support collaborative efforts in a B2B environment. Investigate DEA and cooperative game theory for partnership formation and contract negotiation. Incorporate vagueness and uncertainty through the use of Fuzzy Mathematics. Demonstrate prototypes.

DEA DATA ENVELOPMENT ANALYSIS A tool for performance assessment of business entities performing similar functions under uncertain environment DEA evaluates business entities based on the ratio of weighted sum of outputs to weighted sum of inputs Example: collaborative partner selection Inputs: unit cost, logistic cost Outputs: leadtime, quality, reliability, capacity Incorporate vagueness and uncertainty through the use of fuzzy sets, e.g., “high” unit cost, “long” leadtime.  FUZZY DEA

 -level based approach - Apply parametric programming using   cuts. - Four models: Best-Best, Best-Worst, Worst-Best, Worst-Worst DEA METHODOLOGY Fuzzy DEA is in the form of fuzzy linear program. Issue: Fuzzy LPs are not well defined due to the ambiguity in the ranking of fuzzy sets. APPROACHES

DEA APPROACHES (continued) Possibility approach - Deal with uncertainty in fuzzy objectives and constraints through the use of possibility measures. - Possibility programming model Credibility approach - Replace fuzzy variables by “expected credits” which are derived by using credibility measures. - Credibility programming model

DEA FUZZY DEA SOFTWARE Prototype Implementation Parameter Setting Input & output data and membership functions Data Evaluation Calculate of efficiency measures Report Obtain detailed efficiency measure report

DEA PARAMETER SETTING

DEA DATA EVALUATION AND RESULTS

Game Theoretic Approach to Supply Chain Coordination What is game theory? Analysis of situations involving conflicting interests. Why game theory? A softgoods supply chain involves the activity and interaction of many “players.” Individual players are usually more interested in maximizing their own profits rather than those of the supply chain as a whole. How to Apply? Use channel coordination to optimize the performance of the entire supply chain.

Game Theoretic Approach to Supply Chain Coordination Example: Capacity allocation problem with market search Customers Allocation 1 Retailer 2’s order Retailer 1’s order Allocation 2 Supplier Retailer 1 Retailer 2

Game Theoretic Approach to Supply Chain Coordination Example: Capacity allocation problem with market search Capacity allocation problem When the total order from the retailers exceeds the supplier's capacity, the supplier needs to allocate his/her supply according to allocation rules. Market search Customers, whose demand cannot be satisfied by one retailer due to a stockout, may visit another retailer. Questions How should the retailers place orders? How to maximize the performance of the entire supply chain?

Game Theoretic Approach to Supply Chain Coordination Channel coordination Decentralized system The players behave to maximize their own profit.  Use Game theory to find an equilibrium solution. Centralized system Suppose the entire supply chain is owned by one company.  Optimal solution which maximizes the total expected profit. Integrate Modify the players' payoffs (e.g., wholesale prices) to make the decentralized equilibrium solution achieve the total expected profit of the centralized system.

Due-Date Negotiator A support system for decision making and negotiation between sales management and customers. Achieve realistic promise dates for order delivery. Methodology: Genetic Algorithm, Fuzzy Modeling and Logic. Version 1: Bargaining with monetary penalty & compensation Version 2: Explore resource expansion alternatives Version 3: Real time order entry Version 4: Applicable for assembly production process Loading and capacity allocation using a Genetic algorithm and an order- loading algorithm for both fuzzy and crisp loading algorithms Engine (Visual C++ 6) Orders Customers Products Bill of Materials Manufacturing resources Production process Database Edit the database information Generate reports Interface (Visual Basic 6)

Due-Date Negotiator Data entry

Due-Date Negotiator Order loading

Due-Date Negotiator Reports MPS & Resource utilization Gant chart of MPS Resource allocation