This study develops a framework for optimizing logistics costs using a game theory approach called the "game with nature" model. It employs the Hurwitz criterion as an optimality criterion for evaluating mixed strategies. The Hurwitz criterion allows for obtaining optimal strategies that consider both risks and rewards simultaneously. The framework is demonstrated using a simplified three-level logistics structure of a textile company. This study provides a comprehensive approach to logistics optimization that accounts for both risks and rewards, addressing limitations of prior methods that focused on only one factor.
The document summarizes an article from the International Journal of Management that examines optimizing supply chain logistics costs for an automobile OEM. The article uses a Six Sigma approach and transportation models to develop a two-dimensional matrix analyzing how raw material distance and volumetric weight impact logistics costs. It applies a Define-Measure-Analyze-Improve-Control process and tools like fishbone diagrams and Minitab to identify cost reduction opportunities in a pipe manufacturing company's transportation system. A multi-criteria decision model is also formulated to evaluate optimized transportation solutions considering total product costs.
1. The document discusses supply chain management concepts, including defining a supply chain as all parties involved in fulfilling customer requests.
2. It explains the objective of a supply chain is to maximize overall value, and describes supply chain management as managing flows between stages to maximize total profitability.
3. The document contrasts vertical and horizontal organizational structures, noting that a horizontal structure organized around processes can better integrate functions and create customer value.
This document discusses value chain analysis, which was first proposed by Michael Porter in 1985. It involves identifying a firm's primary and support activities that add value to its products or services and analyzing them to reduce costs or increase differentiation. The key stages of value chain analysis for strategic cost management are identifying activities, establishing their costs and importance, comparing costs, identifying cost drivers, and finding opportunities to reduce costs or improve value through internal and external linkages. This allows firms to assess their competitive positioning and strategically improve quality, reduce time and costs, and increase benefits for both the firm and partners in the value chain.
This document discusses benchmarking logistics processes. It defines competitive benchmarking as measuring products, services, processes, and practices against industry leaders. Benchmarking the logistics process involves mapping out the supply chain as a pipeline and identifying critical points where issues could disrupt the entire process. These points should be benchmarked against best practices from other industries. Key performance indicators should also be identified to continuously monitor critical aspects that contribute most to success or failure, such as those in a balanced scorecard linking measures to strategic goals.
Activity-based costing (ABC) assigns overhead costs to products and services based on their use of resources such as machine hours or labor hours. It was developed to more accurately assign indirect costs than traditional costing methods. ABC identifies activities performed in an organization and assigns costs to these activities using cost drivers. The costs of activities are then assigned to products or services based on their use of each activity. This provides managers with more accurate product costs to make better-informed decisions.
This document discusses cost drivers and their use in strategic cost management. It defines a cost driver as any factor that causes a change in total cost. Costs are grouped into cost pools and then assigned to cost objects using cost drivers. There are four types of cost drivers: volume-based, activity-based, structural, and executional. Volume-based drivers look at aggregate costs, while activity-based drivers examine costs at a more detailed operational level. Structural drivers influence long-term strategic decisions, while executional drivers affect short-term operational decisions. Understanding a company's value chain, strategic positioning, and relevant cost drivers provides insights into cost behavior.
Improving hospital profitability through cost of qualityAlexander Decker
1) The study analyzes the relationship between costs of quality (prevention costs, appraisal costs, internal failure costs, and external failure costs) and profitability of the VIP Nursing Care Unit at Stella Maris Hospital in Makassar, Indonesia from 2008-2010.
2) It finds that prevention and appraisal costs have a significant positive relationship with profitability, while external failure costs have a significant negative relationship. Internal failure costs did not significantly impact profitability.
3) The study concludes that improving allocation of prevention and appraisal costs can increase profitability.
This chapter discusses the importance of performance measurement in supply chains. It explains that establishing metrics allows companies to understand how they are performing and identify areas for improvement. Good metrics should be consistent with company strategies and focus on customer needs. The chapter provides examples of different types of metrics companies can use to measure costs, inventory levels, customer service, and overall supply chain performance. These metrics can be classified in various categories and should be integrated both within and across companies to effectively drive improvement.
The document summarizes an article from the International Journal of Management that examines optimizing supply chain logistics costs for an automobile OEM. The article uses a Six Sigma approach and transportation models to develop a two-dimensional matrix analyzing how raw material distance and volumetric weight impact logistics costs. It applies a Define-Measure-Analyze-Improve-Control process and tools like fishbone diagrams and Minitab to identify cost reduction opportunities in a pipe manufacturing company's transportation system. A multi-criteria decision model is also formulated to evaluate optimized transportation solutions considering total product costs.
1. The document discusses supply chain management concepts, including defining a supply chain as all parties involved in fulfilling customer requests.
2. It explains the objective of a supply chain is to maximize overall value, and describes supply chain management as managing flows between stages to maximize total profitability.
3. The document contrasts vertical and horizontal organizational structures, noting that a horizontal structure organized around processes can better integrate functions and create customer value.
This document discusses value chain analysis, which was first proposed by Michael Porter in 1985. It involves identifying a firm's primary and support activities that add value to its products or services and analyzing them to reduce costs or increase differentiation. The key stages of value chain analysis for strategic cost management are identifying activities, establishing their costs and importance, comparing costs, identifying cost drivers, and finding opportunities to reduce costs or improve value through internal and external linkages. This allows firms to assess their competitive positioning and strategically improve quality, reduce time and costs, and increase benefits for both the firm and partners in the value chain.
This document discusses benchmarking logistics processes. It defines competitive benchmarking as measuring products, services, processes, and practices against industry leaders. Benchmarking the logistics process involves mapping out the supply chain as a pipeline and identifying critical points where issues could disrupt the entire process. These points should be benchmarked against best practices from other industries. Key performance indicators should also be identified to continuously monitor critical aspects that contribute most to success or failure, such as those in a balanced scorecard linking measures to strategic goals.
Activity-based costing (ABC) assigns overhead costs to products and services based on their use of resources such as machine hours or labor hours. It was developed to more accurately assign indirect costs than traditional costing methods. ABC identifies activities performed in an organization and assigns costs to these activities using cost drivers. The costs of activities are then assigned to products or services based on their use of each activity. This provides managers with more accurate product costs to make better-informed decisions.
This document discusses cost drivers and their use in strategic cost management. It defines a cost driver as any factor that causes a change in total cost. Costs are grouped into cost pools and then assigned to cost objects using cost drivers. There are four types of cost drivers: volume-based, activity-based, structural, and executional. Volume-based drivers look at aggregate costs, while activity-based drivers examine costs at a more detailed operational level. Structural drivers influence long-term strategic decisions, while executional drivers affect short-term operational decisions. Understanding a company's value chain, strategic positioning, and relevant cost drivers provides insights into cost behavior.
Improving hospital profitability through cost of qualityAlexander Decker
1) The study analyzes the relationship between costs of quality (prevention costs, appraisal costs, internal failure costs, and external failure costs) and profitability of the VIP Nursing Care Unit at Stella Maris Hospital in Makassar, Indonesia from 2008-2010.
2) It finds that prevention and appraisal costs have a significant positive relationship with profitability, while external failure costs have a significant negative relationship. Internal failure costs did not significantly impact profitability.
3) The study concludes that improving allocation of prevention and appraisal costs can increase profitability.
This chapter discusses the importance of performance measurement in supply chains. It explains that establishing metrics allows companies to understand how they are performing and identify areas for improvement. Good metrics should be consistent with company strategies and focus on customer needs. The chapter provides examples of different types of metrics companies can use to measure costs, inventory levels, customer service, and overall supply chain performance. These metrics can be classified in various categories and should be integrated both within and across companies to effectively drive improvement.
Strategic Cost Management – A Profitability Tool, Bp, Fla, November 20, 2010Barrett Peterson
This document summarizes a presentation given to the Finance Leaders Association on strategic cost management. It discusses various global economic and political drivers that impact strategic costs, such as commodity prices, trade agreements, and banking regulations. It also outlines considerations for current strategic costs, such as healthcare reforms, deficit reduction proposals, and trade discussions. Finally, it discusses the role of strategic cost management in impacted decisions regarding product design and distribution channel choices.
This presentation describes the ASQ QMD Globalization & Supply Chain Technical Committee efforts to inventory existing supplier scorecards for benchmarking and to support its efforts to create supplier scorecard standards
johncachat@hotmail.com
www.peproso.com
Uniform costing aims to standardize costing principles and methods across companies in the same industry. There are several difficulties in implementing a uniform costing system, as cost structures may vary between companies due to differences in size, technology used, product ranges, efficiency levels, and managerial planning. However, uniform costing also provides advantages like facilitating cost comparisons, eliminating unhealthy competition, improving efficiency, providing relevant cost data, and ensuring standardization. For a uniform costing system to be successful, companies must cooperate by sharing accounting information and adopting common costing classifications, distribution methods, and reporting formats.
This document discusses vendor rating systems. Vendor rating systems evaluate and rank vendors based on various performance criteria such as delivery, quality, price, and other factors. These ratings help buyers select vendors, facilitate negotiations, provide feedback to vendors, and encourage continuous performance improvement. The document outlines several specific vendor rating methods including categorical, weighted point, and cost ratio plans that assign scores or rankings to vendors based on different weighted factors and costs.
Bayesian approach for spare parts replenishment policies under uncertaintiesIJERD Editor
The legislative constraints, the need to optimize the dismantling process, the introduction of recycled
parts on the spare parts market are reinforced since the systems in end-of-life phase have become increasingly
profitable. There are few works that treat recycled spare parts integration problem in economic models of
inventory control. These works do not consider uncertainty. In order to manage more realistically the inventory
control of spare parts, we propose a probabilistic model formalized by a Bayesian network. The model is used to
identify the best purchase policy. More precisely, it allows choosing the best proportions between new spare
parts (NSP) and recycled spare parts (RSP) by taking into account the traditional criteria of inventory control
and the availability of the spare parts on the market. The proposed method provides a decision-making tool for
manufacturers who are interested both in reducing the costs of stocks and guaranteeing a minimal availability in
an uncertain environment.
Serialized Optimization Of Supply Chain Model Using Genetic Algorithm And Geo...Jonathan Lobo
• “Serialized Optimization Of Supply Chain Model Using Genetic Algorithm And Geometric Predictions” in international journal for science and advance research in technology Volume 2,Issue 10 in October 2016
This is a partial preview of the document found here:
https://flevy.com/browse/business-document/Cost-Drivers-Analysis-76
Description:
Competitive Cost Analysis is a valuable strategic business framework, as it helps identify potential areas of competitive advantage. Competitive Cost Analysis requires the analysis of relative cost structures of competitors (or potential competitors) within our industry. The relevant unit of analysis should be as focused and specific as possible—for instance, at the business unit or the product level.
There are three techniques primarily used when conducting Competitive Cost Analysis: Financial Ratios Analysis, Value Chain Analysis, and Cost Drivers Analysis. This document will focus on Cost Drivers Analysis.
The document discusses cost drivers and cost behavior. It defines cost drivers as activities or factors that generate costs and have a cause-and-effect relationship with total costs. Direct costs are themselves cost drivers, while other factory costs need identified cost drivers to trace overhead to products. Costs are classified by their behavior as fixed, variable, or semi-variable depending on how they change with activity level. Fixed costs remain the same despite output fluctuations but can change between time periods if the activity level changes significantly.
1) Quality costs include prevention costs, appraisal costs, and failure costs both internal and external. These costs can range from 5-20% of annual sales.
2) Measuring quality costs provides quantitative data to assess quality activities and make improvements. It focuses attention on reducing failure and appraisal costs.
3) The costs of non-quality, including rework, waste, and lost customers, often outweigh apparent quality costs like prevention. A quality system aims to minimize the costs of non-quality.
Procurement dari cost centre menjadi profit centre
Dengan harga harga yang meningkat, namun pendapatan tidak bertambah, strategy cost saving menjadi strategi ujung tombak menjaga profit suatu perusahaan. Procurement cost saving strategy menjadi pilihan yang utama, mengingat procurement menangani 60-80% spending perusahaan (direct & indirect). Peran procurement menjadi semakin strategis, signifikan dan berubah dari cost centre menjadi profit centre.
OPERATIONAL ANALYSIS OF A LOGISTIC PROCESS IN THE PETROLEUM EXPLORATION AND P...Fredjoger Mendes
The objective of this article was to demonstrate the research and use of an operations analysis model unique to logistic activities that could integrate the use of three tools to identify and analyze problems in a process and to prove the interdependence of losses and gains between the various factors that make up an activity. In this proposal the
research of context, concepts, application and evaluations on the models chosen for the integration was made. After designing the integrated model, it was tested in a real case
of application and the results of the analysis were obtained, taking care to contextualize all the technical, social and cultural aspects involved in the process. In the end, the conclusion
exposed the positive and negative aspects of the logistic process evaluated and demonstrated the effectiveness of the integration of tools, identifying opportunities for improvement with the prioritization and indication of a tool for the solution of the deviations.
This document provides an overview of variance analysis, relevant costing, and cost-volume-profit analysis. It defines key variance types like direct material, direct labor, and sales variances. It also explains relevant costing concepts like future cash flows, avoidable costs, opportunity costs, and incremental costs. Finally, it outlines the assumptions, formula, and concepts of cost-volume-profit analysis, including contribution margin, unit contribution margin, and contribution margin ratio. The document concludes that these managerial accounting tools can help businesses make better decisions by identifying variances, considering only relevant costs, and understanding profit impacts of changes in costs, price, sales, and mix.
This is first of a series of 14 articles written by me on Cost Management in Modern Plastics and Polymers. This was between 2005 and 2007. Though a decade old, the central theme is relevant in today's context as well. This is the first piece on Cost Management - A perspective:
Cost Management is defined by me here. "Cost management is any cost improvement that creates and sustains value for the customer better than the competition".
"Customer value is at the center of Cost Management. of cost management. The perspective of cost management is to create customer value. A firm has to find ways of creating
more value for the customer at lesser cost."
This document discusses developing a balanced supplier scorecard. It begins with an introduction to supplier scorecards and balanced scorecards. It then reviews literature on supplier evaluation models and criteria. Two case studies on Honeywell and Tara Aerospace's supplier scorecards are presented. The document proposes a balanced supplier scorecard with four perspectives: financial, customer, internal processes, and innovation/learning. It identifies shortcomings in current scorecards and suggests enhancements like including environmental and social factors. The conclusion emphasizes that effective scorecards should be flexible, updated in real-time, cost-based, and benchmarked.
Pgpm13 project procurement and materialssakariya88
This document is a manual on procurement of materials for a construction firm. It covers factors to consider for purchasing such as technical specifications, approved budget cost, and market prices. It also discusses selecting suppliers based on value, quality, reliability and service. The manual provides guidance on bidding documents, evaluating offers, and finalizing purchases. It stresses developing clear purchasing policies and procedures to guide procurement activities in a strategic, compliant manner.
This is the second part of the Cost management series of article. One of the main purposes of cost information system is to support the decision making process. Cost information is normally required for three purposes: decision support, cost control/cost reduction and statutory requirement.
To be competitive, a company must know its sources of profit and understand its cost structure. Key decision makers must also be aware of how informed their decisions are. Further, they must be able to answer how they landed in a profit or loss making situation.
The document discusses various performance measurement techniques and cost accounting concepts. It begins by defining performance measurement as a scientific approach to assess how well an organization is achieving its objectives. It then lists common performance measures like effectiveness, efficiency, quality, and productivity. Next, it discusses advantages of performance measurement techniques like identifying customer requirements and areas for improvement. It also explains concepts like cost control, cost reduction, uniform costing, inter-firm comparison, and cost audit. Cost control aims to maintain costs within budgets while cost reduction permanently lowers costs. Uniform costing allows comparison between firms and inter-firm comparison evaluates firm performance. Cost audit verifies cost accounting records for accuracy.
IRJET- The Systematic Procedure to Sort Out Contractor in Construction FieldIRJET Journal
This document describes a study that uses the analytical hierarchy process (AHP) to evaluate criteria for selecting contractors in the construction industry. It outlines the AHP methodology, which involves structuring decision problems into a hierarchy, establishing priorities among decision criteria through pairwise comparisons, and synthesizing priorities to determine overall priority rankings of alternatives. The study applies the AHP to evaluate four contractors based on product features, supplier characteristics, and delivery conditions. It finds that Contractor A has the highest overall score based on relatively better product features and supplier characteristics. The AHP provides a systematic, quantitative approach for evaluating multiple decision criteria in contractor selection.
The approaches used in literature for solving combinatorial optimization problems have applied specific methodology or a
specific combination of methodologies to solve it. However, less importance is attached to modeling the solution for the given problem systematically. Modeling helps in analyzing the various parts of the solution clearly, thereby identifying which part of the methodology or combination of methodologies applied is efficient or inefficient. In order to find how efficient the different parts of the applied methodology is or methodologies are, it may be better to solve the given problem using the notion of hyper-heuristics. This can be done by solving the different parts of the given problem with many different methodologies realized, implemented and benchmarked, enabling to choose the best hybrid methodology. A theoretical model or representation of the problem’s solution may facilitate clear proposal and realization of the different methodologies for the various parts of the solution. The literature reveals that there is a need
for a generic model which could be used to represent the solution for combinatorial optimization problems. Therefore, inspired by the basic problem solving behavior exhibited by animals in their day to day life, a new bio-inspired hyper-heuristic generic model for solving combinatorial optimization problems has been proposed. To demonstrate the application of this generic model proposed a problem specific model is derived that solves the web services selection/composition problem. This specialized model has been realized with a trip planning case study and the results are discussed.
Towards Proactive and Flexible Agent-Based Generation of Policy Packages for ...Araz Taeihagh
One of the approaches gaining ground in policy design is the implementation of combinations of policy measures as policy packages with the aim of increasing efficiency and effectiveness of the designed policies. In this paper, we describe the recent advancements in the developments of a virtual environment for the exploration and analysis of policy packages. The virtual environment uses an agent-based modelling approach for the generation of different configurations of policy measures in the policy packages. The benefit of using the approach is the proactive and flexible generation of policy packages as the agents can react to the changes that occur and create packages that are more robust. The system allows faster examination of more alternatives, further exploration of the design space, and testing the effects of changes and uncertainties while formulating policies. The results demonstrate the benefit of using agent-based modelling approaches in the design of complex policies.
Decision Support Systems in Clinical EngineeringAsmaa Kamel
This document provides an overview of the Analytic Hierarchy Process (AHP) decision support system and presents a case study on using AHP to make medical equipment scrapping decisions. The key points are:
1) AHP breaks down a complex decision problem into a hierarchy, then uses pairwise comparisons to determine criteria weights and rank alternatives. It was used in this case study to evaluate 9 dialysis machines for potential scrapping.
2) Criteria for the dialysis machine scrapping decision included age, performance, safety record, and costs. Data was incomplete so the study simulated different scenarios to examine the impact.
3) AHP derived local and global priorities to determine each machine's overall priority for scra
Strategic Cost Management – A Profitability Tool, Bp, Fla, November 20, 2010Barrett Peterson
This document summarizes a presentation given to the Finance Leaders Association on strategic cost management. It discusses various global economic and political drivers that impact strategic costs, such as commodity prices, trade agreements, and banking regulations. It also outlines considerations for current strategic costs, such as healthcare reforms, deficit reduction proposals, and trade discussions. Finally, it discusses the role of strategic cost management in impacted decisions regarding product design and distribution channel choices.
This presentation describes the ASQ QMD Globalization & Supply Chain Technical Committee efforts to inventory existing supplier scorecards for benchmarking and to support its efforts to create supplier scorecard standards
johncachat@hotmail.com
www.peproso.com
Uniform costing aims to standardize costing principles and methods across companies in the same industry. There are several difficulties in implementing a uniform costing system, as cost structures may vary between companies due to differences in size, technology used, product ranges, efficiency levels, and managerial planning. However, uniform costing also provides advantages like facilitating cost comparisons, eliminating unhealthy competition, improving efficiency, providing relevant cost data, and ensuring standardization. For a uniform costing system to be successful, companies must cooperate by sharing accounting information and adopting common costing classifications, distribution methods, and reporting formats.
This document discusses vendor rating systems. Vendor rating systems evaluate and rank vendors based on various performance criteria such as delivery, quality, price, and other factors. These ratings help buyers select vendors, facilitate negotiations, provide feedback to vendors, and encourage continuous performance improvement. The document outlines several specific vendor rating methods including categorical, weighted point, and cost ratio plans that assign scores or rankings to vendors based on different weighted factors and costs.
Bayesian approach for spare parts replenishment policies under uncertaintiesIJERD Editor
The legislative constraints, the need to optimize the dismantling process, the introduction of recycled
parts on the spare parts market are reinforced since the systems in end-of-life phase have become increasingly
profitable. There are few works that treat recycled spare parts integration problem in economic models of
inventory control. These works do not consider uncertainty. In order to manage more realistically the inventory
control of spare parts, we propose a probabilistic model formalized by a Bayesian network. The model is used to
identify the best purchase policy. More precisely, it allows choosing the best proportions between new spare
parts (NSP) and recycled spare parts (RSP) by taking into account the traditional criteria of inventory control
and the availability of the spare parts on the market. The proposed method provides a decision-making tool for
manufacturers who are interested both in reducing the costs of stocks and guaranteeing a minimal availability in
an uncertain environment.
Serialized Optimization Of Supply Chain Model Using Genetic Algorithm And Geo...Jonathan Lobo
• “Serialized Optimization Of Supply Chain Model Using Genetic Algorithm And Geometric Predictions” in international journal for science and advance research in technology Volume 2,Issue 10 in October 2016
This is a partial preview of the document found here:
https://flevy.com/browse/business-document/Cost-Drivers-Analysis-76
Description:
Competitive Cost Analysis is a valuable strategic business framework, as it helps identify potential areas of competitive advantage. Competitive Cost Analysis requires the analysis of relative cost structures of competitors (or potential competitors) within our industry. The relevant unit of analysis should be as focused and specific as possible—for instance, at the business unit or the product level.
There are three techniques primarily used when conducting Competitive Cost Analysis: Financial Ratios Analysis, Value Chain Analysis, and Cost Drivers Analysis. This document will focus on Cost Drivers Analysis.
The document discusses cost drivers and cost behavior. It defines cost drivers as activities or factors that generate costs and have a cause-and-effect relationship with total costs. Direct costs are themselves cost drivers, while other factory costs need identified cost drivers to trace overhead to products. Costs are classified by their behavior as fixed, variable, or semi-variable depending on how they change with activity level. Fixed costs remain the same despite output fluctuations but can change between time periods if the activity level changes significantly.
1) Quality costs include prevention costs, appraisal costs, and failure costs both internal and external. These costs can range from 5-20% of annual sales.
2) Measuring quality costs provides quantitative data to assess quality activities and make improvements. It focuses attention on reducing failure and appraisal costs.
3) The costs of non-quality, including rework, waste, and lost customers, often outweigh apparent quality costs like prevention. A quality system aims to minimize the costs of non-quality.
Procurement dari cost centre menjadi profit centre
Dengan harga harga yang meningkat, namun pendapatan tidak bertambah, strategy cost saving menjadi strategi ujung tombak menjaga profit suatu perusahaan. Procurement cost saving strategy menjadi pilihan yang utama, mengingat procurement menangani 60-80% spending perusahaan (direct & indirect). Peran procurement menjadi semakin strategis, signifikan dan berubah dari cost centre menjadi profit centre.
OPERATIONAL ANALYSIS OF A LOGISTIC PROCESS IN THE PETROLEUM EXPLORATION AND P...Fredjoger Mendes
The objective of this article was to demonstrate the research and use of an operations analysis model unique to logistic activities that could integrate the use of three tools to identify and analyze problems in a process and to prove the interdependence of losses and gains between the various factors that make up an activity. In this proposal the
research of context, concepts, application and evaluations on the models chosen for the integration was made. After designing the integrated model, it was tested in a real case
of application and the results of the analysis were obtained, taking care to contextualize all the technical, social and cultural aspects involved in the process. In the end, the conclusion
exposed the positive and negative aspects of the logistic process evaluated and demonstrated the effectiveness of the integration of tools, identifying opportunities for improvement with the prioritization and indication of a tool for the solution of the deviations.
This document provides an overview of variance analysis, relevant costing, and cost-volume-profit analysis. It defines key variance types like direct material, direct labor, and sales variances. It also explains relevant costing concepts like future cash flows, avoidable costs, opportunity costs, and incremental costs. Finally, it outlines the assumptions, formula, and concepts of cost-volume-profit analysis, including contribution margin, unit contribution margin, and contribution margin ratio. The document concludes that these managerial accounting tools can help businesses make better decisions by identifying variances, considering only relevant costs, and understanding profit impacts of changes in costs, price, sales, and mix.
This is first of a series of 14 articles written by me on Cost Management in Modern Plastics and Polymers. This was between 2005 and 2007. Though a decade old, the central theme is relevant in today's context as well. This is the first piece on Cost Management - A perspective:
Cost Management is defined by me here. "Cost management is any cost improvement that creates and sustains value for the customer better than the competition".
"Customer value is at the center of Cost Management. of cost management. The perspective of cost management is to create customer value. A firm has to find ways of creating
more value for the customer at lesser cost."
This document discusses developing a balanced supplier scorecard. It begins with an introduction to supplier scorecards and balanced scorecards. It then reviews literature on supplier evaluation models and criteria. Two case studies on Honeywell and Tara Aerospace's supplier scorecards are presented. The document proposes a balanced supplier scorecard with four perspectives: financial, customer, internal processes, and innovation/learning. It identifies shortcomings in current scorecards and suggests enhancements like including environmental and social factors. The conclusion emphasizes that effective scorecards should be flexible, updated in real-time, cost-based, and benchmarked.
Pgpm13 project procurement and materialssakariya88
This document is a manual on procurement of materials for a construction firm. It covers factors to consider for purchasing such as technical specifications, approved budget cost, and market prices. It also discusses selecting suppliers based on value, quality, reliability and service. The manual provides guidance on bidding documents, evaluating offers, and finalizing purchases. It stresses developing clear purchasing policies and procedures to guide procurement activities in a strategic, compliant manner.
This is the second part of the Cost management series of article. One of the main purposes of cost information system is to support the decision making process. Cost information is normally required for three purposes: decision support, cost control/cost reduction and statutory requirement.
To be competitive, a company must know its sources of profit and understand its cost structure. Key decision makers must also be aware of how informed their decisions are. Further, they must be able to answer how they landed in a profit or loss making situation.
The document discusses various performance measurement techniques and cost accounting concepts. It begins by defining performance measurement as a scientific approach to assess how well an organization is achieving its objectives. It then lists common performance measures like effectiveness, efficiency, quality, and productivity. Next, it discusses advantages of performance measurement techniques like identifying customer requirements and areas for improvement. It also explains concepts like cost control, cost reduction, uniform costing, inter-firm comparison, and cost audit. Cost control aims to maintain costs within budgets while cost reduction permanently lowers costs. Uniform costing allows comparison between firms and inter-firm comparison evaluates firm performance. Cost audit verifies cost accounting records for accuracy.
IRJET- The Systematic Procedure to Sort Out Contractor in Construction FieldIRJET Journal
This document describes a study that uses the analytical hierarchy process (AHP) to evaluate criteria for selecting contractors in the construction industry. It outlines the AHP methodology, which involves structuring decision problems into a hierarchy, establishing priorities among decision criteria through pairwise comparisons, and synthesizing priorities to determine overall priority rankings of alternatives. The study applies the AHP to evaluate four contractors based on product features, supplier characteristics, and delivery conditions. It finds that Contractor A has the highest overall score based on relatively better product features and supplier characteristics. The AHP provides a systematic, quantitative approach for evaluating multiple decision criteria in contractor selection.
The approaches used in literature for solving combinatorial optimization problems have applied specific methodology or a
specific combination of methodologies to solve it. However, less importance is attached to modeling the solution for the given problem systematically. Modeling helps in analyzing the various parts of the solution clearly, thereby identifying which part of the methodology or combination of methodologies applied is efficient or inefficient. In order to find how efficient the different parts of the applied methodology is or methodologies are, it may be better to solve the given problem using the notion of hyper-heuristics. This can be done by solving the different parts of the given problem with many different methodologies realized, implemented and benchmarked, enabling to choose the best hybrid methodology. A theoretical model or representation of the problem’s solution may facilitate clear proposal and realization of the different methodologies for the various parts of the solution. The literature reveals that there is a need
for a generic model which could be used to represent the solution for combinatorial optimization problems. Therefore, inspired by the basic problem solving behavior exhibited by animals in their day to day life, a new bio-inspired hyper-heuristic generic model for solving combinatorial optimization problems has been proposed. To demonstrate the application of this generic model proposed a problem specific model is derived that solves the web services selection/composition problem. This specialized model has been realized with a trip planning case study and the results are discussed.
Towards Proactive and Flexible Agent-Based Generation of Policy Packages for ...Araz Taeihagh
One of the approaches gaining ground in policy design is the implementation of combinations of policy measures as policy packages with the aim of increasing efficiency and effectiveness of the designed policies. In this paper, we describe the recent advancements in the developments of a virtual environment for the exploration and analysis of policy packages. The virtual environment uses an agent-based modelling approach for the generation of different configurations of policy measures in the policy packages. The benefit of using the approach is the proactive and flexible generation of policy packages as the agents can react to the changes that occur and create packages that are more robust. The system allows faster examination of more alternatives, further exploration of the design space, and testing the effects of changes and uncertainties while formulating policies. The results demonstrate the benefit of using agent-based modelling approaches in the design of complex policies.
Decision Support Systems in Clinical EngineeringAsmaa Kamel
This document provides an overview of the Analytic Hierarchy Process (AHP) decision support system and presents a case study on using AHP to make medical equipment scrapping decisions. The key points are:
1) AHP breaks down a complex decision problem into a hierarchy, then uses pairwise comparisons to determine criteria weights and rank alternatives. It was used in this case study to evaluate 9 dialysis machines for potential scrapping.
2) Criteria for the dialysis machine scrapping decision included age, performance, safety record, and costs. Data was incomplete so the study simulated different scenarios to examine the impact.
3) AHP derived local and global priorities to determine each machine's overall priority for scra
COMPARISON BETWEEN THE GENETIC ALGORITHMS OPTIMIZATION AND PARTICLE SWARM OPT...IAEME Publication
Close range photogrammetry network design is referred to the process of placing a set of
cameras in order to achieve photogrammetric tasks. The main objective of this paper is tried to find
the best location of two/three camera stations. The genetic algorithm optimization and Particle
Swarm Optimization are developed to determine the optimal camera stations for computing the three
dimensional coordinates. In this research, a mathematical model representing the genetic algorithm
optimization and Particle Swarm Optimization for the close range photogrammetry network is
developed. This paper gives also the sequence of the field operations and computational steps for this
task. A test field is included to reinforce the theoretical aspects.
Comparison between the genetic algorithms optimization and particle swarm opt...IAEME Publication
The document compares the genetic algorithms optimization and particle swarm optimization methods for designing close range photogrammetry networks. It presents the genetic algorithm and particle swarm optimization as two popular meta-heuristic algorithms inspired by natural evolution and collective animal behavior, respectively. The document develops mathematical models representing the genetic algorithm and particle swarm optimization for close range photogrammetry network design and evaluates them in a test field to reinforce the theoretical aspects.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Analytical Hierarchical Process has been used as a useful methodology for multi-criteria decision making environments with substantial applications in recent years. But the weakness of the traditional AHP method lies in the use of subjective judgement based assessment and standardized scale for pairwise comparison matrix creation. The paper proposes a Condorcet Voting Theory based AHP method to solve multi criteria decision making problems where Analytical Hierarchy Process (AHP) is combined with Condorcet theory based preferential voting technique followed by a quantitative ratio method for framing the comparison matrix instead of the standard importance scale in traditional AHP approach. The consistency ratio (CR) is calculated for both the approaches to determine and compare the consistency of both the methods. The results reveal Condorcet- AHP method to be superior generating lower consistency ratio and more accurate ranking of the criterion for solving MCDM problems.
Decision support systems, Supplier selection, Information systems, Boolean al...ijmpict
For organizations operating with number of products/services and number of suppliers, to select the right
supplier meeting all their requirements will be a challenging job. Such organizations need a good
decision support system to evaluate the suppliers effectively. Several decision support systems have been
reported to deal with complex selection process to decide the right supplier. Many mathematical models
have also been developed. This paper presents a new method, named as Bit Decision Making (BDM)
method, which treats such complex system of decision making as a collection and sequence of reasonable
number of meaningful and manageable sub-systems by identifying and processing the relevant decision
criteria in each sub-system. Help of Boolean logic and Boolean algebra is taken to assign binary digit
values to the selection criteria and generate mathematical equations that correlate the inputs to the output
at each stage of decision making. Each sub-system with its own mathematical model has been treated as a
standardized decision sub-system for that phase of making decision in evaluating suppliers. The sequence
and connectivity of the sub-systems along with their outputs finally lead to selection of the best supplier. A
real-world case of evaluation of information technology (IT) tenders has been dealt with for application of
the proposed method. The paper discusses in detail the theory, methodology, application and features of
the new method.
This document discusses using genetic algorithms to solve a multi-objective traveling salesman problem (MOTSP) that considers both cost and CO2 emissions. It provides background on genetic algorithms and the traveling salesman problem. The study aims to identify how tuning genetic operators and parameters can improve the efficiency of genetic algorithms in solving the MOTSP with CO2 emissions. Empirical results show that performance improves with some combinations of parameters and operators.
International Journal of Mathematics and Statistics Invention (IJMSI)inventionjournals
International Journal of Mathematics and Statistics Invention (IJMSI) is an international journal intended for professionals and researchers in all fields of computer science and electronics. IJMSI publishes research articles and reviews within the whole field Mathematics and Statistics, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
4313ijmvsc02A FUZZY AHP APPROACH FOR SUPPLIER SELECTION PROBLEM: A CASE STUDY...ijmvsc
Supplier selection is one of the most important functions of a purchasing department. Since by deciding the best supplier, companies can save material costs and increase competitive advantage. However this decision becomes complicated in case of multiple suppliers, multiple conflicting criteria, and imprecise parameters. In addition the uncertainty and vagueness of the experts’ opinion is the prominent characteristic of the problem. Therefore an extensively used multi criteria decision making tool Fuzzy AHP can be utilized as an approach for supplier selection problem. This paper reveals the application of Fuzzy AHP in a gear motor company determining the best supplier with respect to selected criteria. The contribution of this study is not only the application of the Fuzzy AHP methodology for supplier selection problem, but also releasing a comprehensive literature review of multi criteria decision making problems. In addition by stating the steps of Fuzzy AHP clearly and numerically, this study can be a guide of the methodology to be implemented to other multiple criteria decision making problems.
A virtual environment for formulation of policy packagesAraz Taeihagh
The interdependence and complexity of socio-technical systems and availability of a wide variety of policy measures to address policy problems make the process of policy formulation difficult. In order to formulate sustainable and efficient transport policies, development of new tools and techniques is necessary. One of the approaches gaining ground is policy packaging, which shifts focus from implementation of individual policy measures to implementation of combinations of measures with the aim of increasing efficiency and effectiveness of policy interventions by increasing synergies and reducing potential contradictions among policy measures. In this paper, we describe the development of a virtual environment for the exploration and analysis of different configurations of policy measures in order to build policy packages. By developing systematic approaches it is possible to examine more alternatives at a greater depth, decrease the time required for the overall analysis, provide real-time assessment and feedback on the effect of changes in the configurations, and ultimately form more effective policies. The results from this research demonstrate the usefulness of computational approaches in addressing the complexity inherent in the formulation of policy packages. This new approach has been applied to the formulation of policies to advance sustainable transportation.
Credit Scoring Using CART Algorithm and Binary Particle Swarm Optimization IJECEIAES
Credit scoring is a procedure that exists in every financial institution. A way to predict whether the debtor was qualified to be given the loan or not and has been a major concern in the overall steps of the loan process. Almost all banks and other financial institutions have their own credit scoring methods. Nowadays, data mining approach has been accepted to be one of the wellknown methods. Certainly, accuracy was also a major issue in this approach. This research proposed a hybrid method using CART algorithm and Binary Particle Swarm Optimization. Performance indicators that are used in this research are classification accuracy, error rate, sensitivity, specificity, and precision. Experimental results based on the public dataset showed that the proposed method accuracy is 78 % and 87.53 %. In compare to several popular algorithms, such as neural network, logistic regression and support vector machine, the proposed method showed an outstanding performance.
A model for profit pattern mining based on genetic algorithmeSAT Journals
Abstract
Mining profit oriented patterns is a novel technique of association rule mining in data mining, which basically focuses on important issues related with business. As it is well known that every business aims to generate the profit and find the ways to improve the same. In earlier days association rule mining was used for market basket analysis and targeted only some of the business and commercial aspects. Afterwards the researchers started to aim the most prominent element of any business i.e. Profit, and determined the innovative way to generate the association rules based on profit. Profit oriented patterns mining approach combines the statistic based pattern mining with value-based decision making to generate those patterns with the maximum profit and some ways to generate recommenders for future strategy. To achieve the desired goal the traditional association rule mining alone is not effectual, so we combine the strength of genetic algorithm with association rule mining to enhance its capability. The study shows that Genetic Algorithm improves the effectiveness and efficiency of association rule mining outcome, since genetic algorithms are competent to handle the problems related with the uncertainty, multi-dimensional, non-differential, non-continuous, and non-parametrical, non-linearity constraint and multi-objective optimization problems. In this paper we apply the concept of profit pattern mining with genetic algorithm to generate profit oriented pattern which help out in future business expansion and fulfill the business objective.
Keywords: Data Mining, Association Rule Mining, Profit Pattern Mining, Genetic Algorithm
A model for profit pattern mining based on genetic algorithmeSAT Journals
Abstract
Mining profit oriented patterns is a novel technique of association rule mining in data mining, which basically focuses on important issues related with business. As it is well known that every business aims to generate the profit and find the ways to improve the same. In earlier days association rule mining was used for market basket analysis and targeted only some of the business and commercial aspects. Afterwards the researchers started to aim the most prominent element of any business i.e. Profit, and determined the innovative way to generate the association rules based on profit. Profit oriented patterns mining approach combines the statistic based pattern mining with value-based decision making to generate those patterns with the maximum profit and some ways to generate recommenders for future strategy. To achieve the desired goal the traditional association rule mining alone is not effectual, so we combine the strength of genetic algorithm with association rule mining to enhance its capability. The study shows that Genetic Algorithm improves the effectiveness and efficiency of association rule mining outcome, since genetic algorithms are competent to handle the problems related with the uncertainty, multi-dimensional, non-differential, non-continuous, and non-parametrical, non-linearity constraint and multi-objective optimization problems. In this paper we apply the concept of profit pattern mining with genetic algorithm to generate profit oriented pattern which help out in future business expansion and fulfill the business objective.
Keywords: Data Mining, Association Rule Mining, Profit Pattern Mining, Genetic Algorithm
This document proposes a methodology for evaluating statistical classification models for churn prediction using a composite indicator. It considers factors beyond just accuracy, like robustness, speed, interpretability and ease of use. The methodology will be tested on classification models applied to real customer data from a Spanish retail company. It also analyzes the impact of different variable selection methods on model performance.
A consistent method to determine flexible criteria weightsarmankoopal
This document discusses methods for determining criteria weights in multi-criteria transport project evaluation. It introduces the Analytic Hierarchy Process (AHP) as a method that derives criteria weights from decision makers' subjective judgments through pairwise comparisons. AHP uses the principal eigenvector of the positive pairwise comparison matrix to obtain the criteria weights. While subjective approaches allow flexibility, they can also be time-consuming and inconsistent between decision makers. The document proposes using a proportion-based method that provides both consistency through its algorithm and flexibility by incorporating input from decision makers and the public.
A BENCHMARK MODEL FOR INTERNAL ASSESSMENT OF INDUSTRY USING FUZZY TOPSIS APPR...ijmech
Internal assessment is one of the most important factor of an industry, needs appropriate improvement
planning between the departments with development of Benchmark model among them. The proposed study
applies Fuzzy Technique for Order Preference by Similarity to Ideal Solution to rank different alternatives.
The preliminary results indicate that the proposed model is capable of determining appropriate
competition between departments which are Human Resource, Finance, Production, Quality Assurance. To
remove the subjectivity, the linguistic data about the attributes is converted into a crisp score by using
fuzzy numbers and then the different alternatives are evaluated based on attributes by TOPSIS approach to
find the best alternative according to the industry’s requirement. Thus the endeavor has been made by the
authors to give a simple model for the evaluation of internal assessment of an industry
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...Donc Test
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
2. 2 SAGE Open
must take into account that the system will be optimized
taking into account only risks or just winnings.
It should be understood that logistics, from a practical
point of view, often requires quick decisions, which should
not mean that in making such decisions, the manager mini-
mizes some risks, thereby not increasing others (Wilson
et al., 2017; Zimon et al., 2020). Though some other strate-
gies such as marketing, that is, green marketing might also
be fruitful in improving decisions (Chen et al., 2021). It
has become very challenging for organizations to take
effective decisions about the logistics processes.
This study employed the theoretic game with the nature
model that demonstrates the vital approach to the optimiza-
tion processes that is precise, concurrent, with similar risks
and winnings. The contribution of this study is to develop a
comprehensive logistic framework to optimize the supply
chains and logistics processes. However, despite their impor-
tance, most of the proposed methods for this purpose in
terms of solutions can offer optimization processes either
from maximizing winnings or for risks. This article describes
a newly developed synthetic Hurwitz criterion (Eltantawy,
2011; Nyhuis & Schmidt, 2011; Santa-Eulalia et al., 2011) to
be precise, its generalization for mixed strategies, enabling
the logistics manager to make decisions, taking into account
both the winnings and risks of the decisions made in such
processes of chain supply and logistics, such as logistics of
products, when decisions must be taken more than once and
regularly. Finally, this study develops a criterion that pro-
vides the optimal strategy to solve decision-making prob-
lems for gains and risks in the logistic department.
Rest of the paper is structures as follows. Section 2 is the
detailed literature review; Section 3 explains the Hurwitz
Criterion theory with optimization parameters. The develop-
ment of the logistic optimization model is presented in sec-
tion 4. The conclusion of the study is presented in the last
section of study.
Literature Review
The just-in-time decision in logistics based on consumer sen-
timents can provide the manufacturer a notable competitive
advantage (Bayar et al., 2020). An analysis of existing mod-
els and decision-making methods in the field of optimization
of logistics systems and logistics processes revealed a certain
pattern. So, even though interest in logistics as a whole in
recent decades, and therefore in the optimization of its pro-
cesses has increased, all existing methods and models, as
noted above, tilt either toward the choice of a decision
regarding risks or toward a solution problem regarding wins.
The optimization of cost in logistics has a vital impact on
social performance, customer satisfaction, and improvement
in service in order to develop a sustainable logistic network.
Whereas the sustainable goals for logistics lead to reducing
the cost also have minimal effects on the environment (Eratlı
Şirin & Şahin, 2020).
All the above leads to the opinion that there is a need to
develop a mathematical model that allows us to solve the
problems of choosing the optimal method, model, or system
in a complex way, that is, without exposing, to the choice of
optimization, either regarding gains or regarding risks, these
are the determining factors of the relevance of the study.
However, numerous studies have developed the method-
ologies for evaluation of logistic cost in the supply chain
field are spare due to the complexity of logistics system and
involvement of a variety of costs. Therefore, the research
substantiates the need for the development and subsequent
development of a game-theoretic model for choosing the
optimal logistics system in the business (Hewitt, 2014).
Based on the constructed comparison function, a new crite-
rion has been developed for making decisions about the opti-
mality of pure strategies in the face of uncertainty from the
joint position of gains and risks, called the Hurwitz synthetic
criterion. The analysis of the synthetic criterion Hurwitz
includes the theorem on the equivalence conditions of the
synthetic Hurwitz criterion to the classical Hurwitz criterion
regarding risks is proved. Moreover, the theorem on the
incomparability in the general case of the synthetic Hurwitz
criterion with the classical Hurwitz criteria for gains and
relative to risks was proved.
Further, a theorem on the necessary and sufficient condi-
tions for the possibility of expressing the price of the game
with the synthetic Hurwitz criterion through the price of the
game under the Hurwitz criteria for wins and relative risks
has been proved. This study defines the mix strategies based
on the synthetic Hurwitz criterion to analyze the mixed
expansion of the game with the synthetic Hurwitz criterion.
The foundation of the Hurwitz method is also based on math-
ematical modeling like other MCDM methods. The main
advantage of the Hurwitz approach, it has a simple procedure
to find the optimal solution compared to other methods such
as Fuzzy AHP and TOPSIS procedures. As it may be noticed,
by applying the Hurwitz method, the optimal solutions may
be obtained in a short period. The application of the Hurwitz
method provides precise solutions and is suitable for solving
real-life environmental problems. Finally, a theorem is
proved that formalizes the central interconnections of the
synthetic Hurwitz criterion with the Hurwitz criteria con-
cerning risks and relative wins in the framework of many
optimal mixed strategies.
Management of logistics systems in business is an elabo-
rate scheme designed by using different mathematical meth-
ods such as systematic analysis, simulation modeling,
probability theory, game theory, and many others.Application
of game theory in the logistics system management used to
be limited by the only optimization processes, that is, maxi-
mization of winnings or minimizing risks (Manzini &
Gamberini, 2008). Tasks of analysis, selection of efficient
solutions, and continuous optimization processes of supply
chains and logistics systems under conditions of uncertainty
are considered to be very important (Wang et al., 2019).
3. Yan et al. 3
The optimization processes of logistics costs have recently
been reported (Yan & Zhang, 2015). Also, the four main ele-
ments, including informatization, service quality, operation
efficiency, and promotion of technical upgrading to manage
logistics at a higher level with big data, have been studied
recently (Yan et al., 2019). Also, some authors have consid-
ered the adaptive neuro-fuzzy inference system for queuing
system optimization processes (Stojčić et al., 2018). Dutta
et al. (2020) proposed a multi-objective optimization model
to evaluate the three dimensions of sustainability, economic
(cost), social (workdays created and lost due to harms at
work), and environment (environmental impact on logistics
processes) for reverse logistics in the context of India mar-
ket. However, these studies lack a synthetic approach to the
optimization processes that is more precise and simultane-
ous, with an ordinary account for the risks and winnings.
Research Framework
Hurwitz Criterion Theory
As an example of cost optimization processes, a simplified
three-level logistic structure of Joint Stock Company (JSC)
in the textile sector, namely “UzTEX” is used. At the zero
levels of structure, there is a production of goods for the
placement of products. On the first level of the structure,
distribution centers engaged in distributing manufactured
products through the dealerships regarding their predicted
needs. On the second level, some dealerships perform the
retail sale of products. Schematically, the structure is
shown in Figure 1.
“Game with nature” used as the optimization processes
model, the optimality of the strategies is determined by the
new synthetic Hurwitz criterion, in this case, for mixed strat-
egies. Taking into account the fact that by nature, we can
include any of the many uncertain factors, thus appliance of
such games for making an optimal decision is quite exten-
sive. Below are the main components of the model “Game
with nature,” and concepts and definitions for mixed strate-
gies. To do this, first, let us consider and analyze the standard
optimality criteria in conditions of uncertainty. After that by
criteria such as the Hurwitz criterion regarding winnings and
Hurwitz criterion regarding risk will be constructed and also
analyzed new synthetic Hurwitz criterion.
The Wald Criterion of Decision-Making
This criterion belongs to the group of criteria under which a
player makes decisions under conditions of uncertainty, but
this does not mean that given such circumstances, the Wald
criterion cannot be applied in the real economy.
The Wald criterion is a criterion regarding the winnings of
the player. Under this criterion, the behavior of the player is
prudent, as the player focuses on the “worst” outcome of the
game, and therefore decision-making by this criterion
focused more on the fact to minimize loss than to maximize
winnings. T an indicator of the effectiveness of the strategy
is called the smallest winning under this strategy:
T z j m i n
i i
= = …
{ } = …
min : , , , , , , ,
1 2 1 2 (1)
W-the price of the game in pure strategies is called the
greatest of W-parameter of the effectiveness of pure strate-
gies that is the largest of the smallest winnings along with
each strategy:
T max T i n
C i
s = = …
{ }
: , ,
1 2 (2)
According to the Wald criterion is the strategy, which is opti-
mal if its efficiency parameter is the same.
The Maximal Criterion of Decision-Making
In contrast to the Wald criterion, the maximal criterion is a
criterion of extreme optimism. This means that the player, by
making the decision, is focused on the most favorable pos-
sible state of nature and, therefore, the highest possible win-
ning. Of course, this is a perilous approach, especially given
the fact that the probability of a possible state of nature to the
player in this case, as with the Wald criterion, is unknown. In
other words, the maximal criterion is also the criterion of
decision-making in conditions of uncertainty.
N an indicator of the effectiveness of the strategy is called
the most significant winning along with this strategy:
N max z j m i n
i i
= = …
{ } = …
: , , , , , , ,
1 2 1 2 (3)
N the price of the game in pure strategies is called the
greatest of N—indicators of the effectiveness of pure strate-
gies, that is, the greatest of the greatest winnings for each
strategy:
Figure 1. The winnings of the player in mixed strategies.
4. 4 SAGE Open
N max N i n
C i
s = = …
{ }
: , ,
1 2 (4)
The strategy is called optimal among maximal criteria if,
by selecting it, the player Z can count the maximum possible
winning, that is, if its efficiency parameter equals the price of
the game.
The Savage Criterion of Decision-Making
According to the definition of the Savage criterion, this crite-
rion, as well as the Wald criterion, is a criterion of extreme
pessimism. However, the difference between these two crite-
ria lies in the Savage criterion is a criterion of extreme pes-
simism regarding games of risks. It directs player Z the fact
that when choosing a strategy, it is necessary to consider that
nature at this point will be in the condition in which the risk
will be the greatest. The savage criterion is known in the lit-
erature as the “criterion of minimax regret,” introduced in
1951 by L. J. Savage (Savage, 1951). To determine the lead-
ing indicators of this criterion, understanding a game of risk
will be needed (Xiao et al., 2020). In this case, player Z
accepts the decision to choose a pure strategy in the game
with nature, based on the matrix of the winnings. However,
the matrix of the winnings is not always adequately and fully
reflecting the current situation. The choice of strategy is
influenced not only on winnings but also on indicators of
“success” or “failure” choice of strategy that is dependent on
favorable conditions of nature for more chances to win. The
parameter of favorable circumstances of nature Kj (relatively
to the set of pure strategies) is called the most significant
winning among winnings in the given condition of nature:
γ j i
z i m i n
= = …
{ } = …
max : , , , , , , ,
1 2 1 2 (5)
The degree of success of the selection strategy Zi in the
state of nature Kj characterized by risk vij not receiving the
highest possible winning, that equals to the difference
between the parameter of favorability γj condition of nature
Kj and winning zij:
v z i n j m
ij j ij
= − = … = …
γ , , , , , , , , .
1 2 1 2 (6)
From (5) and (6) it follows that v i
ij ≥ = …
0 1 2
, , , ,
n j m
, , , , .
= …
1 2 the matrix, composed of elements (7), is
called the risk matrix:
Vz = (7)
Kj
Zi
K1 K2 . . . Kn
Z1 v 11 v 12 . . . v 1n
Z2 v 21 v 22 . . . v 2n
. . . . . . . . . . . . . . .
Zm v m1 v m2 . . . v mn
Fzr—parameter of the effectiveness of the strategy Zi
according to Savage criterion is the greatest of the risks when
choosing this strategy:
Fzr v j n i m
ij
= = …
{ } = …
max : , , , , , , ,
1 2 1 2 (8)
Fzr—the price of the game in pure strategies is called the
least Fzr—the parameter of pure strategies:
Fzr Fzr i m
C
S
i
= = …
{ }
min : , , ,
1 2 (9)
The strategy is considered optimal according to the crite-
rion of Savage if the risk of not getting the most significant
winning player Z cannot be higher than the minimax.
The Minimum Criterion of Decision-Making
This criterion is a criterion of extreme optimism, but unlike
the maximal criterion, it is the criterion related to the risks.
This fact also makes minimum criterion the opposite in the
meaning of the Savage criterion.
According to the minimum criterion of player Z, in the
process of making decisions about choice of strategy exam-
ines the nature as its ally, which means that at the moment of
decision nature will be in the most favorable condition in
which the risk of the chosen strategy is equal to zero.
φ—Parameter of the effectiveness of the strategy Zi for a
minimum criterion is called the minimum risk in this
strategy:
φi ij
v j n i m
= = …
{ } = …
min : , , , , , , ,
1 2 1 2 (10)
Risks of the no negativity are: φi ≥ 0, i = 1, 2 . . ., m.
φ—The price of the game in pure strategies is called the
least parameter of the effectiveness of pure strategies:
ϕ ϕ
C
S
i i m
= = …
{ }
min : , , ,
1 2 (11)
As the matrix of risk contains zero, then there are rows
where they stand, and therefore, by (10) and inequality
φi ≥ 0, i = 1, 2, . . ., m, the parameter of effectiveness appro-
priate strategies will be zero. Hence from (11), it follows that
ϕC
S
= 0.
From (10) and (11) it follows that ϕC
S
= min
minv J n i m
ij : , , , : , , , }
= …
{ } = …
1 2 1 2 , which is φ—the price
of the game is a minimum game in pure strategies.
The strategy is optimal according to a minimum criterion;
if the performance indicator is equal to zero, using this crite-
rion gives the player the opportunity to choose without risk
strategy. Considered the so-called standard criteria could
help the player assess the optimality of a strategy or only
with the position of winnings if we talk about criteria about
the winnings, or only with the position of risks if we are talk-
ing about criteria about risks. However, the choice of strate-
gies in such a position is inevitably accompanied by the risk
5. Yan et al. 5
of not receiving the maximum winning in the chosen strat-
egy. Such a factor is significant; therefore, to leave it without
attention is highly inappropriate. In this regard, an attempt
was made to study and analyze the synthetic principle of
optimality strategies with the common point of view of win-
nings and risks (Cachon & Netessine, 2006). As a result of
the study and analysis of the synthetic assessment principle
of optimality, a new synthetic Hurwitz criterion allows the
player in the decision-making process to consider both the
winnings and the risks (Eltantawy, 2011; Zhang, 2010).
The Hurwitz Criterion of Strategy Optimality of
Winnings
This criterion belongs to the group of combined criteria, the
primary purpose consists of using methods of combining—
weighing to achieve generalization of the classical criteria
and mitigate their extreme principles to determine the opti-
mal strategies. Accordingly, based on these criteria, the
player can hope that made decisions will be more effective
than those who made only based on standard criteria.
Notwithstanding the preceding, it should also be noted, that
a balanced approach to the choice of the strategy proposed
by Hurwitz criterion about the winnings, does not always
lead to an equitable result. There is a problem with smooth-
ing the Wald criterion of extreme pessimism and extreme
optimism of maximal criterion with the Hurwitz criterion
(Aparicio et al., 1967).
The Hurwitz Criterion of Optimality of Pure
Strategies of the Winnings
Let α ∈ [0,1], (1–α) ∈ [0,1] indicators of optimism and
respectively pessimism of the player Z when choosing a
strategy, the effectiveness of which is assessed to them
only from the standpoint of winnings. When selecting the
index parameter α (or α−1), which the player Z determines
from subjective reasons, it usually affects the measure of
responsibility. This means that the closer the optimism
parameter to zero, the higher the desire of the decision-
maker to hedge, and respectively vice versa. Khq
—an indi-
cator of the effectiveness of the strategy Zi is determined as
follows: (q-“payoff”).
Kh T N N T T i m
i
q
i i i i i
α α α α
( )= −
( ) + = −
( ) + = …
1 1 2
, , , , (12)
Accordingly, if α = 0, that Khq
(α)—indicator of the effec-
tiveness of the strategy Zi turns into T—an indicator of the
effectiveness of this strategy, which is a measure of the effec-
tiveness of the strategy based on Wald criterion, and N—the
parameter of effectiveness, that is, the parameter of effec-
tiveness according to maximal criterion at α = 1, and when α
∈ (0,1) is a convex combination T—parameter and N param-
eter of effectiveness.
Khq
(α)—the price of the game in pure strategies for the
Hurwitz criterion with an index of optimism α ∈ [0,1] is
the maximum of Khq
(α)—parameter of pure strategies
effectiveness:
Kh Kh i m
C
q
i
q
s α α
( ) = ( ) = …
{ }
max : , , ,
1 2 (13)
Khq
(α)—the optimal strategy in the set of pure strategies for
the Hurwitz criterion with a parameter of optimism α ∈ [0,1] is
called a pure strategy Z l m
l ∈ …
{ }
( )
1 2
, , , , the parameter of
effectiveness has the same Khq
(α)—the price of the game:
Kh Kh
l
q
Cs
α α
( ) = ( ) (14)
The Hurwitz Criterion of Optimality of Mixed
Strategies to Winnings
The Hurwitz criterion of optimality of pure strategies of the
player Z, helps us find the pure strategy optimal under this
criterion among pure strategies.
However, during the game, with a repeated selection of
the same strategies, under constant conditions of the many
positions of nature may occur a situation when a player
wants to change his choice of strategy. Moreover, in this
case, it is recommended by Labsker (2001) to go to a random
choice of strategies with a certain probability, or, in other
words, to use a mixed strategy.1
So, a game with nature with a matrix of winnings (1),
supplemented with the line, which presents indicators of
favorable positions of nature γ j ij
max z i m
= = …
{ }
: , , , ,
1 2
j n
= …
1 2
, , , .
The set of all mixed strategies Q q q qm
= …
( )
1 2
, , , ,
q i m
i ≥ = …
0 1 2
, , , , marked by C. Winning G QK j
( ),
Q C j n
∈ = …
, , , ,
1 2 in a game situation QK j
( ), is determined
by the following formula:
G QK q z j n
j
i
m
i ij
( )= = …
=
∑
1
1 2
, , , , (15)
Where, z i m j n
ij , , , , ; , , ,
= … = …
1 2 1 2 —the elements of
matrix winning (1).
Khq
(α)—parameter of the effectiveness of mixed strategy
Q the formula is:
Kh Q T Q N Q
N Q T Q T Q Q C
q
;
,
α α α
α
( ) = −
( ) ( )+ ( )
= ( )− ( )
+ ( ) ∈
1
(16)
Where T Q G Q K N Q G Q K
j n
j
j n
j
( ) = ( ) = ( )
≤ ≤ ≤ ≤
min ( , ); max ,
1 1
—
parameter of the effectiveness of the mixed strategy Q
accordingly to the Wald criterion and maximal criterion.
Khq
(α)—the following formula defines the price of the
game in mixed strategies:
Kh Kh Q Q C
C
q q
α α
( ) = ( ) ∈
{ }
max ; : (17)
6. 6 SAGE Open
Khq
(α)—the optimal strategy in the set of mixed strate-
gies is called the strategy Qf
if the equivalent ratios are as
follows:
Q C Kh Q Kh
f f Kh q f
C
q
q
∈ ↔ ( )= ( )
( )
( )
α
α α
; (18)
The Hurwitz Criterion of Optimality of Strategies
With the Risks
The Hurwitz criterion of optimality of strategies about risks,
as well as Hurwitz criterion of optimality of strategies of
winnings, belong to a group of combined criteria for the
selection of optimal strategies in conditions of uncertainty.
The essence of the Hurwitz criterion of optimality about
the risks consists of the smoothing of extreme pessimism
Savage criterion and ultimate optimism minimum crite-
rion, as in the previous case of the Hurwitz criterion about
winnings.
Let us say ω ∈ [0,1], (1–ω) ∈ [0,1]—parameters of
respectively optimism and pessimism of the player Z when
choosing a strategy, the effectiveness which is assessed by
them only from the standpoint of game risks.
The choice of parameter values ω (or [1–ω]), as well
as in the framework of Hurwitz criterion of optimality of
pure strategies of wins, the player Z determines from the
basis of measure responsibility to be taken when choosing
a strategy.
In ω = 0, the Hurwitz criterion concerning the risks related
to the Savage criterion, when ω = 1 accordingly in minimum
criterion, and when ω∈(0,1) is a convex combination of
these parameters.
As Khv
ω
( ) —parameter of the effectiveness of the strat-
egy Zi, we will look through the number: the letter
“v”—“risk.”
Kh Fzr
Fzr Fzr i m
i
v
i i
i i i
ω ω ωϕ
ϕ ω
( ) = −
( ) +
= ( ) + = …
1
1 2
, , , ,
(19)
Rhv
ω
( )—the price of the game in pure strategies accord-
ing to the Hurwitz criterion with the parameters of optimism
ω∈[ ]
0 1
, is the minimum of Khv
ω
( ) —parameters of effec-
tiveness of pure strategies:
Kh Kh i m
C
v
i
v
s ω ω
( ) = ( ) = …
min{ : , , , .
1 2 (20)
Khv
ω
( )—optimal in the set of pure strategies according
to the Hurwitz criterion with the parameter of optimism
ω∈( )
0 1
, is called a pure strategy Z l m
l ∈ …
{ }
( )
1 2
, , , , the
parameter of effectiveness has the same Khv
ω
( )—the price
of the game:
Kh Kh
l
v
C
v
s
ω ω
( ) = ( ) (21)
Also, note that in particular, parameters of optimism in
the Hurwitz criteria about winnings and relation to risks can
be the same: α = ω.
The Hurwitz criterion of optimality of mixed strategies
about the risks: before presenting the basic concepts of
Hurwitz criterion about the risks, recall the definition of risk:
v QK G D K D C G Q K
G Q K q v
j j j
j j
i
m
ij
( )= ( ) ∈
{ }
− ( )
= − ( )=
=
∑
max , : ,
,
γ
1
i
ij j n
, , , ,
= …
1 2
(22)
a number representing the risk in selecting a player Z of
mixed strategy Q q q q C
m
= …
( )∈
1 2
, , , and when the state of
nature Kj.
Now we introduce the basic concepts of the Hurwitz
criterion to the risk with the optimism parameter
ω ω
∈[ ] ( )
0 1
, ;Khv
—the criterion for mixed strategies:
Kh Q Fzr Q Q
Q Fzr Q Fzr Q Q C
v
;
,
ω ω ωϕ
ω ω
( ) = −
( ) ( )+ ( )
= ( )− ( )
+ ( ) ∈
1
(23)
Khv
(ω)—Parameter of the inefficiency of the strategy
Q, where Fzr Q v Q K Q v Q K
j n
j
j n
j
( ) = ( ) ( ) = ( )
≤ ≤ ≤ ≤
max , ; max ,
1 1
γ —
parameters of the inefficiency of mixed strategy Q accord-
ing to the Savage criterion and criterion of minimum.
Kh the Kh Q Q C
C
v r
ω ω
( ) = ( ) ∈
{ }
min ; : (24)
Khv
(ω) price of the game in mixed strategies.
The strategy is called the optimal Khv
(ω)—optimal) in
many mixed strategies if the following equivalent:
Q C Kh Q Kh
f f Kh v f
C
v
v
∈ ↔ ( )= ( )
( )
( )
ω
ω ω
; (25)
It should be noted that the choice of the player Z of win-
ning-parameter, meaning ω ∈ [0,1], is subjective and is asso-
ciated with the psychological characteristics of the player Z,
defining his attitude to winning and risks.
Results and Discussion
Theorem 1
In any game with nature, there is a strategy that is optimal in
many mixed strategies, according to the synthetic criterion of
Hurwitz under all winning parameters and optimism param-
eters about the winnings and risks.
Proof of theorem 1. Proven the continuity of parameter of
effectiveness Kh Q
q
;α
( ) strategy Q according to Khq
α
( )—
the criterion for any measure of optimism α∈[ ]
0 1
, concern-
ing the winnings as a function of argument Q on many C.
Proven the continuity Kh Q
v
;ω
( ) at any rate of optimism
ω∈[ ]
0 1
, concerning risks as a function argument Q on
many C.
Hence, from (16; 19; 23), we obtain the continuity
Kh Q
qv
; , ,
α τ ω
( ) on many C as a linear combination
7. Yan et al. 7
of continuous functions Kh Q
q
;α
( ) and Kh Q
q
;ω
( ) with
coefficients τ and 1−
( )
τ . And as many C—simplex and
consequently closed and limited in ρn
, then according to the
theorem Weierstrass function Kh Q
qv
; , ,
α τ ω
( ) attains on
this many it is maximum, that is, for each triplet of parame-
ters α τ ϕ
, , ,
∈[ ]
0 1 there is a mixed strategy Qf
, such as
Kh Q Kh
qv
C
qv
; , , , , .
α τ ϕ α τ ω
( ) = ( )
In α = 0 from (16; 19; 23) we get
Kh Q Kh Q
qv v
; , , ; ,
0 α ω ω
( ) = − ( ) that is, the synthetic crite-
rion of Hurwitz becomes the criterion of the “opposite” to
the Hurwitz criterion concerning risks with the parameter of
optimism ( ω), and does not depend on the parameter of opti-
mism α relating to winnings.
In τ = 0 from (16; 19; 23) have Kh Q
qv
; , ,
1 α ω
( ) =
Kh Q
v
; ,
ω
( ) that is, synthetic Hurwitz criterion is trans-
formed into the Hurwitz criterion, relative to the winning’s
optimism index α and does not depend on the index of opti-
mism ω regarding the risks.
Theorem 2
The following conditions are equivalent:
(1) For each value of the winning parameters of the opti-
mism τ∈( )
0 1
, many strategies that are optimal in
many mixed strategies according to the synthetic cri-
terion of Hurwitz, matches with a variety of strate-
gies that are optimal in many mixed strategies, and
the Hurwitz criterion, concerning the winnings and
according to the Hurwitz criterion relating to risks,
that is, equality is true:
C C C
f Kh f Kh f Kh
qv q v
( ( (
, , ) ) )
,
, , , ,
α τ ϕ α ω
τ α ω
( ) ( ) ( )
=
∈( ) ∈[ ]
∩
0 1 0 1
(26)
(2) Many strategies that are optimal in many mixed strat-
egies and according to the Hurwitz criterion about
the winnings and according to the Hurwitz criterion
about the risks is not empty:
C C
f Kh f Kh
q v
( (
) )
, , ,
α ω
∅ α ω
( ) ( )
∩ ≠ ∈[ ]
0 1 (27)
(3) The price of the game KhC
qv
α τ ω
, ,
( ) in mixed syn-
thetic strategies according to the Hurwitz criterion
with the winning indicator τ∈[ ]
0 1
, seems to be a
linear combination of the prices of the game in mixed
strategies according to the Hurwitz criterion concern-
ing the winnings and according to the Hurwitz crite-
rion about the risks with coefficients respectively τ
and 1−
( )
τ :
Kh Kh Kh
C
qv
C
q
C
v
α τ ω τ α τ ω
, ,
( ) = ( )− −
( ) ( )
1 (28)
(4) The chart of game price KhC
qv
α τ ω
, ,
( ) in mixed syn-
thetic strategies for the Hurwitz criterion with the
winning parameter τ∈[ ]
0 1
, as a function argument
τ∈[ ]
0 1
, are a segment in this line 0 1
≤ ≤
τ with the
beginning and the ending Kh Kh
C
qv
C
v
0
( ) = − ( )
ω
Proof of theorem 2. The theorem will be proven if we
prove the validity of the following closed chain of implica-
tions:
1 2 3 4 1
) ) ) ) )
→ → → → (29)
We start the proof of the theorem that will prove the
implication:
1 2
) )
→ (30)
Assume that the validity of condition (1), that is, valid
equality (26). As in Theorem 1 whenever the value of win-
ning-parameter τ∈[ ]
0 1
, there is a strategy KhC
qv
α τ ω
, ,
( )
that is optimal in many mixed strategies, then plural
C f Kh
qv
(
, , )
α τ ϕ
( )
is not empty. Then from equality (26) implies
(27); thus, the implication (29) is proved.
Let us prove the implication,
2 3
) )
→ (31)
Let the condition (2), that is, be performed (27). Then
thereisthestrategyQf
иQ C C
f f Kh f Kh
q v
∈ ∈[ ]
( ) ( )
∩
( (
) )
, , ,
α ω
α ω 0 1
.
Owing to this affiliation for each τ∈[ ]
0 1
, definitions
(23) and (19) we will have:
τ α
τ ω τ α τ ω
α
Kh
Kh Kh Q K Q
Kh Q
C
q
C
v
C
q f
C
v f
qv f
( )−
−
( ) ( )= ( )− −
( ) ( )
=
1 1
; ;
; ,τ
τ ω α τ ω
, , ,
( )≤ ( )
KhC
qv
(32)
Let us prove the inequality, reverse the inequality (31):
Kh Kh Q Q C
Kh Q
Kh Q
C
qv qv
q
v
α τ ω α τ ω
τ α τ
, , max ; , , :
max
;
( ) = ( ) ∈
{ }
=
( )− −
( )
1
;
;
:
max ; :
max
ω
τ α
τ
( )
∈
≤ ( )
∈
{ }
+ −
(
Q C
Kh Q Q C
q
1)
) ( )
∈
{ }
= ( ) ∈
{ }
− −
( ) ( )
Kh Q Q C
Kh Q Q C
Kh Q
v
q
q
; :
max ; :
min ; :
ω
τ τ α
τ ω
1 Q
Q C
Kh Kh
C
q
C
v
∈
{ }
= ( )− −
( ) ( )
τ α τ ω
1
(33)
Inequalities (32) and (33) prove equality (28). The impli-
cation 2 3
) )
→ established. Now let us demonstrate the con-
sequence 3 4
) )
→ .
8. 8 SAGE Open
Let the condition (3), that is, valid equality (28), from
which it is evident that the price of the game
KhC
qv
α τ ω τ
, , ,
( ) ≤ ≤
0 1 is a linear function of the argument τ ,
defined on the interval [0,1]. Therefore, the chart of games
price KhC
qv
α τ ω τ
, , , ,
( ) ≤ ≤
0 1 there is a segment of non-neg-
ative slope in the liner 0 1
≤ ≤
τ with the beginning in
Kh Kh
C
q
C
v
0
( ) = − ( )
ω and the ending Kh Kh
C
q
C
v
1
( ) = ( )
α .
So, we have proved the feasibility of the conditions (4)
and together with its validity of implications 3 4
) )
→ .
Now let us prove the implication,
4 1
) )
→ (34)
Let it be performed (4). Now we prove the inclusion
C C C
f Kh f Kh f Kh
qv q v
( ( (
, , ) ) )
, , , .
α τ ω τ ω
α ω
( ) ( ) ( )
∪ ∩ ∈[ ]
0 1 (35)
Let
τ
α τ ω
*
∈( ) ∈
( )
( )
0 1
, ; .
, ,
Q C
f f Khqv
(36)
Then,
Kh Q Kh
qv f
C
qv
; , , , ,
τ α ω τ α ω
* *
( )= ( ) (37)
Strategy Qf
generates a cut–graph of the function
Kh Q
qv f
; , ,
*
τ α ω
( ) argument τ∈[ ]
0 1
, , which is due to the
equality (37) together with cut Khqv
α τ ω
, ,
( ) has a common
point τ τ α ω
* *
, , ,
Khqv
( ). This point lies inside of the segment
KhC
qv
α τ ω
, ,
( ), τ*
Since the point lies inside the interval [0,1].
But as the cut Khqv
α τ ω
, ,
( ) is the upper envelope cut
Kh Q
qv
; , ,
α τ ω
( ) , then the cut Kh Q
qv f
; , ,
α τ ω
( ) the same
matches with the cut Kh Kh Q
C
qv qv f
α τ ω α τ ω
, , : ; , ,
( ) ( )=
KhC
qv
α τ ω τ
, , ,
( ) ≤ ≤
0 1, from this equation and also from
equations (19) and (23) we get:
− ( )= =
( )
= =
( )
= − ( )
Kh Q Kh Q
Kh
Kh Kh Q
v f qv f
C
qv
C
v q f
; ; , ,
, ,
, ;
ω τ α ω
τ α ω
ω
0
0
α
α
τ α ω τ ω
α
( )
= =
( )= ( )
= ( )
Kh Q Kh
Kh
qv f
C
qv
C
q
; , , , ,
0 1
(38)
Note that if τ*
= 0 or τ*
=1 , we would not be able to
affirmthatthesegmentsKh Q Kh Q
qv f
C
qv f
; , , ; ; , ,
τ α ω τ α ω
( ) ( )
match. From equations (37) and (38), here comes belong-
ing Q C Q C
f f Kh f f Kh
v v
∈ ∈
( )
( ) ( )
( )
ω α
; , from where we get
Q C Q C
f f Kh f f Kh
v v
∈ ∈
( )
( ) ( )
( )
∩
ω α
.
So, inclusion (35) is proved.
Now we prove the inclusion
C C C
f Kh f Kh f Kh
q v qv
α ω α τ ω
( )
( ) ( )
( ) ( )
( )
∩ ∪
, , (39)
That is the reverse inclusion to (35).
Let strategy Q C C
f Kh f Kh
v q
∈ ∈( )
∩
( ( )
)
, , .
τ 0 1 Then
Kh Q Kh Kh Q Kh
v f
C
v q f
C
q
; , ;
ω ω α α
( )= ( ) ( )= ( ) and
therefore, for any strategy Q C
∈ there is:
Kh Q Kh Q Kh Q Kh
Kh Kh
C
qv q v
C
q
C
q
; , , ; ;
τ α ω τ α τ ω τ
τ τ
( ) = ( )− −
( ) ( ) ≤
− −
( ) =
1
1 q
q f v f qv
f
Q Kh Q Kh
Q
( )− −
( ) ( )=
( ) ≤ ≤
1
0 1
τ
τ α ω τ
; , , , .
This inequality means that Q C
f f Khqv
∈
( )
( )
τ α ω
, ,
. So, the
inclusion (39) is proved. The inclusion (38) and (39) confirm
the validity (26).
Thus, the implication (34) and, together with it, the chain
of implications is proved.
Applying the above-obtained results attempts to find the
optimal strategy in mixed strategies.
As shown from the analysis of the problem, in many
cases, only two strategies are used among three:
Z1: For delivery and distribution of produced goods to use
their trucks without the lease of railway platforms.
Z2: For delivery of manufactured goods to use their trucks
and distributing products to use vehicles of other transport
companies, without the lease of railway platforms.
Because of the company’s activities and multiple strate-
gies, it is advisable to go to mixed strategies in this game
problem.
Let Q q q q
= −
( ) ≤ ≤
1 0 1
, , , —general view of a mixed
strategy in a game with nature, in which the player Z has two
pure strategies, which are defined by a matrix of winnings
(40):
(40)
Using the matrix (40), we calculate the winnings of the
player Z if the strategy Q q q
= −
( )
1 , and for each state of
nature:
G Q K q q
q
G Q K
; . .
. . ,
; .
1 1587 7 1 1692 4
104 7 1587 7
2 1962
( ) = − −
( )−
= − −
( ) = − 4
4 1 1678 3
284 1 1962 4
3 2398 6 1 1930 5
−
( )−
= −
( ) = − −
( )−
=
q q
q
G Q K q q
.
. .
; . .
−
− −
468 1 2398 6
. .
q
(41)
Symbolical graphs of these winnings are presented above
(Figure 1).
Kj
Zi
K1 K2 K3
Z1 −1587.7 −1962.4 −2398.6
Z2 −1692.4 −1678.3 −1930.5
ϒi −1587.7 −1678.3 −1930.5
9. Yan et al. 9
We present the result after the necessary calculations that
are not reflected in the article because of its bulkiness.
Q Z
1 1 1 0 1 2
−
( ) = ( ) =
, , is Khq
α
( ) optimal when
α α α
1 2 3
< < ;
Z1, Z2—is Khq
α
( )—optimal when α α
= 2 ;
Z1—is Khq
α
( )—optimal when α α
2 1
< < .
KhC
q
α
α α α
( ) =
− − ≤ <
−
≈ −
252 2 1930 5 0
1028805272
715920
1437 03943
1
. . ;
. ;
;
. . ;
. ;
α α
α α α α
α
=
− − ≤ <
−
≈
1
1 2
252 2 1930 5
804758105
5587080
1432 72660 =
=
− ≤ <
α
α α α
2
2
810 9 2398 6 1
. . ;
(42)
C
Z
Z
Z
Z Z
Z
f Khq
(
;
;
;
, ;
α
α α
α α
α α α
α α
( )
=
{ } ≤ ≤
{ } =
{ } < <
{ } =
{ }
2 1
2 1
2 1 2
1 2 2
1
0
;
; .
;
, ;
;
α α
α α
α α
α α
2
2 1
1 2 2
1 2
1
0
1
< ≤
=
{ } ≤ ≤
{ } =
{ } < ≤
Z
Z Z
Z
(43)
We now turn to the Hurwitz criterion for risks. Forming
the matrix of risks generated by the matrix of winnings (40):
(44)
Using the matrix of risks (44), we calculate the risks of the
player Z:
v Q K q q q
v Q K q q q
; . .
; . .
1
2
0 1 104 7 104 7
284 1 1 0 284 1
( ) = −
( )+ =
( ) = −
( )+ = − + 2
284 1
481 1 1 0 468 1 468 1
3
.
; . . .
v Q K q q q
( ) = −
( )+ = − +
(45)
These risks are presented graphically below (Figure 2).
Means:
Q Z
1 1 1 0 1 2
−
( )=( )=
, , is Khv
ω
( )—optimal when ω ω ω
1 2
< <
Q Z
1 1 1 0 1 2
−
( )=( )=
, , is Khv
ω
( )—optimal when ω ω
= 2.
Q Z
1 1 1 0 1 2
−
( )=( )=
, , is Khv
ω
( )—optimal when ω ω
2 1
< < .
KhC
v
ω
ω ω ω
ω ω
ω
( ) =
− + ≤ ≤
=
− +
33 6291288 85 56156 0
76 494
104 7 104
1
1
. . ;
. ;
. .
. ;
. ; ;
. . ;
7
19 151856
104 7 104 7 1
1 2
2 2
2
ω ω ω
ω ω ω ω
ω ω ω
< <
= =
− + < ≤
(46)
Figure 2. The risks of the player in mixed strategies.
Kj
Zi
K1 K2 K3
Z1 0 284.1 468.1
Z2 104.7 0 0
C
Q q q
Q
f Khv
(
, . ; . ;
. ; .
ω
ω ω
( )
=
= −
( ) = ( )
{ } ≤ <
= (
1 0 223 0 980 0
0 976 0 980
2 2 1
)
)
{ } =
{ } < <
{ } =
{ } < ≤
;
;
;
; .
ω ω
ω ω ω
α α
ω ω
1
2 1 2
2 2
2 2 1
Z
Z
Z
=
= ≤ <
{ } < ≤
{ . ; . ;
; .
Q
Z
( }
0 223 0 980 0
1
1
2 2
ω ω
ω ω (47)
From (43) and (47), it is clear that
C C Z
f Kh f Kh
q v
α ω
α α ω ω
( )
( ) ( )
( )
∩ = { } ≤ ≤ < ≤
2 2 1
0 1
; ; . There-
fore, according to Theorem 2: C Z
f Khqv
τ α ω
, ,
( )
( ) = { }
2 ;
0 1 0 323 1
≤ ≤ < ≤
α ω
; . .
Conclusions
This study develops a comprehensive framework to optimize
the supply chain and logistic processes. By the analysis and
the calculations carried out in the result section, it is easy to
observe that the optimum strategy is Z2, to be precise during
the logistics processes, along with the signed contract on the
rendering of transport-forwarding services from the other
transport company. In order to achieve this goal, this study
used the synthetic Hurwitz approach to define the criterion
and analyzed a convex combination of the efficiency func-
tions of the Hurwitz criterion of optimality for gains and
relative risks. The developed criterion is defined for solving
games with nature from a joint point of view, that is, at the
same time choosing the optimal strategy both for gains and
risks. Within the framework of the developed criterion, the
following questions were investigated.
The theorem on the equivalence of the synthetic Hurwitz
criterion to the Hurwitz criterion regarding risks is proved.
10. 10 SAGE Open
The theorem on the incomparability of the synthetic Hurwitz
criterion with the Hurwitz criterion regarding wins and with
the Hurwitz criterion regarding risks has been proved.
Further, a theorem on the necessary and sufficient conditions
for estimating the price of games of the synthetic Hurwitz
criterion through the prices of the game of the Hurwitz crite-
ria regarding winnings and risks has been proved. Moreover,
the theorem on the existence in any game with the nature of
an optimal strategy in many mixed strategies according to
the Hurwitz synthetic criterion is proved. Finally, a theorem
is proved that formalizes the primary interconnections of the
synthetic Hurwitz criterion with the Hurwitz criteria con-
cerning risks and relative wins in the framework of many
optimal mixed strategies.
This summary is very logical and from the real economy,
that is, in conditions where the logistics process is regular.
This means the rest of the considered company strategy, con-
sidering that such transport and subsequent distribution are
the regular process, have higher risks and costs. If one is only
using this transport failure or other unforeseen situation, it
could delay delivering goods to customers. Moreover, in this
case of using the railway platforms, additionally, when demand
is low, this type of logistics can result in high costs. Of course,
in the case of the use of strategy Z2, there is a risk of entering
into a contract with a bad company, but this factor can be mini-
mized with careful marketing of the transport services market.
This study is beneficial for managers and decision-makers to
make their logistic processes more sustainable.
Policy Implications and Limitations
This study provides theoretical, practical implications. This
study contributes to the enrichment of logistic cost, espe-
cially developing a new approach to provide the optimal
solution. From a practical perspective, this study suggests
valuable guidelines for managers, policy, and decision-
makers to understand the logistic cost and performance in
the logistic department. Lower the logistics costs of deliv-
ering the products, encouraging increasing sales, rising
trade, and exploring new markers at national and inter
national levels. Whereas reducing logistics costs will help
improve the efficiency of the supply chain and related
functions such as infrastructures, services, procedures, and
regulation. This study also assists the policymakers in pre-
paring fact-based policies to understand the main drivers of
logistics cost and how cost reduction affected the logistics
sector in the economy.
This study has some limitations. Initially, we developed
the framework of logistic cost based on Hurwitz criterion
in accordance with other studies without considering a
case. For future research, it would be more interesting to
use the application of this model in real-time and evaluate
the comparison. Additionally, the different approaches can
be used to develop the framework for the optimization pro-
cess of logistic costs. The framework developed in this
paper can only provide references and supporting informa-
tion for the logistics decision-making process, such as all
relevant logistics cost items and quantifying each of the
cost elements.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect
to the research, authorship, and/or publication of this article.
Funding
The authors disclosed receipt of the following financial support for
the research, authorship, and/or publication of this article: National
Social Science Foundation of China: Grant Number (BGA200057).
ORCID iD
Muhammad Ikram https://orcid.org/0000-0003-2656-9302
Note
1. Mixed strategy Q q q q q i m q
m i
i
m
i
= …
( ) ≥ = … ∑ =
=
1 2
1
0 1 2
, , , , , , , , ,
—the action of the player Z, consisting of a random choice of
pure strategy Zi with probability q i m
i , , , , .
= …
1 2
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