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In this paper we consider integrated planning of the supply chain at a multi-site pulp company. In addition to the traditional focus on pulp products, also energy aspects are considered, both in the form of raw material and as revenue generating products. The idea is that energy intense raw materials not only gives fibre to the pulp process but also generates an energy surplus that can be used in different ways to create additional value or revenues. The planning horizon is one year and monthly time periods are considered. Decisions included in the planning are; purchase and transportation of raw materials from harvest areas to pulp mills, production allocation by dividing the production among the pulp mills, energy mix by choosing the energy input at the pulp mills, and distribution of products from mills to customer. An MILP model for the entire supply chain is proposed. A number of different scenarios including real data from the case company are analyzed and evaluated. The aim of the study is thus to investigate the effects on profitability while taking energy issues into consideration., An earlier version of this paper was presented at ICAE 2012, 5- 8 July, Suzhou, China.

The integration of scheduling and control in the process industry is a topic that has been frequently discussed during the recent years, but many challenges remain in order to achieve integrated solutions that can be implemented for large-scale industrial sites. In this paper we consider production control under disturbances in the supply of utilities at integrated sites together with the integration towards production scheduling. Utilities, such as steam and cooling water, are often shared between the production areas of a site, which enables formulation of an optimization problem for determining the optimal supply of utilities to each area at the occurrence of a disturbance. Optimization in two timescales is suggested to handle the scheduling and disturbance management problems in a hierarchical fashion. The suggested structure has been discussed with companies within the chemical process industry. A simple example is provided to show how the structure may be used, Process Industry Centre (PIC) supported by the Swedish Foundation for Strategic Research (SSF).

Exergy is a concept that is gaining an increasingly wider recognition as a proper measure for the actual energy resources consumed, when energy is used. Energy as such is indestructible, but exergy is not. As entropy is generated while energy is used, exergy is consumed. Exergy can be interpreted as the qualitative content of energy, or as energy in its highest quality. Therefore, there is an interest in investigating this concept from as many theoretical aspects as possible. In earlier papers the author has developed formulae for the exergy potential of a system of finitely extended objects, not necessarily having any environment. It was there shown that the classical formula for exergy obtains as one of the objects grows beyond all bounds thereby taking on the rôle as an environment. In this current paper formulae are derived for the exergy content of an isolated body in thermodynamic disequilibrium, viewed as a system of infinitely many objects each with infinitesimal extension and in microscopic equilibrium.

This paper begins by consolidating industrial challenges and research issues concerning Product/Service Systems obtained through various activities by the authors. Based on this, it points out the importance of the holistic view in further research in this area so that PSS providers do not fall into local optimization. The intent of this contribution to our research community includes shedding light on interesting issues that thus far have been relatively invisible and with narrower scope.

Purpose – The purpose of this paper is to present and test a new model for competitive capabilities.Traditionally, a cumulative model has been viewed as having one sequence of building competitivecapabilities in a firm in support of market needs, including quality, delivery, cost efficiency andflexibility. Although appealing as a conceptual model, empirical testing has not been able to fullysupport the cumulative model. This paper acknowledges the need for a hybrid approach to managingcapability progression. It brings together the literature on trade-offs, cumulative capabilities, andorder winners and qualifiers.Design/methodology/approach – A new hybrid approach for modelling competitive capabilities istested empirically using data from the high performance manufacturing (HPM) study, round 3,including three industries and seven countries – a total of 211 plants.Findings – The hybrid model shows significantly better fit with the data from the sample than thecumulative models suggested by previous literature. Empirical support is found for the traditionalperception that a high level of quality is a prerequisite for a high level of delivery performance.However, cost efficiency and flexibility do not exhibit a cumulative pattern. Instead, the results showthat they are developed in parallel. The findings suggest that a balance between cost efficiency andflexibility is built upon high levels of quality and delivery performance.Research limitations/implications – Since we limit the empirical investigation to three industriesand seven countries, it would be interesting to extend the testing of this model to more industries andcountries. This research shows that combining perspectives and insights from different researchstreams – in this case, trade-off theory and the concepts of cumulative capabilities, and order winnersand qualifiers – can be fruitful.Practical implications – The results of this paper provides managers with guidelines concerningthe configuration of compet

Purpose – The process of choosing the best part in the public procurement of bus transports is easier if the demands of the qualifications are well specified and detailed. On the other hand, detailed contracts will lead to limitations and could force the entrepreneurs to use uneconomical, but most of all, less environmentally friendly alternatives. The effects of using less specified contracts in order to achieve more environmentally friendly bus traffic have been tested and evaluated by optimization models. The paper aims to discuss these issues. Design/methodology/approach – A mathematical model with binary variables is developed to evaluate the environmental effects of more optimized bus sizes. Computational results from a bus service provider are reported. Different scenarios have been tested in order to evaluate the environmental effects of less detailed contracts. Findings – The results of the mathematical model indicate that all parts involved in the public procurement process, the public authority, the entrepreneur and the customers, will gain from more flexible and less detailed contracts. Research limitations/implications – The bus system in this study is limited to data from one region in Sweden. However, a pre-study indicates that this region is representative with regard to public procurement of bus transports in Sweden as well as in major parts of Europe. Originality/value – In terms of the total environmental impact from the public transport system, the paper focuses on the importance of creating relevant and less detailed contracts in public procurement. A mathematical model and data from a Swedish bus service provider have been used.

Services are getting increasingly important in the manufacturing industries today. As a result, it has become common for companies to provide a combination of services and products as an integrated offering. This paper focuses on such business models and development processes. It explores the current status and needs of industries on those issues. Through reviewing 12 journal articles tackling these issues and complementary academic contributions, it was found that uncertainty is a critical concept to be addressed properly. Based on this result, nine Swedish companies interested in such business were interviewed on this issue. The matured providers raised convincing customers as their major challenges while others consider understanding the internal meaning of IPSO business is their current challenge. In addition, there is a wish to have a quantitative tool for companies to utilize upon developing such offerings.

This paper investigates a multi-stage hybrid flow shop scheduling problem with challenging characteristics including lot sizing, calendar constraints and sequence-dependent setup times in a real-world printed circuit board (PCB) assembly shop. Besides, other characteristics such as unrelated parallel machines and stage skipping also complicate the problem. Such features make the scheduling problem very difficult to find an optimal or near optimal solution. To reduce the complexity of such a PCB scheduling problem, this study develops a hierarchical approach which decomposes the original problem into two highly coupled sub-problems including job sequencing and lot scheduling with lot sizing, and further proposes a two-stage ant colony algorithm with lot sizing to evolve best results in the makespan performance. Extensive computational experiments have been conducted to illustrate the superiority of the algorithm in terms of computational time and stability., Funding Agencies|National Natural Science Foundation of ChinaNational Natural Science Foundation of China [51775348, 51435009]The accepted version of this article is available on the author's personal web page

In this paper we base our study on the application of the Laplace transform to risk preference theory. With a constant measure of absolute risk aversion (Pratt, 1964; Arrow, 1965), the Certainty Monetary Equivalent (CME) of a risky project previously has been developed into an expression involving the logarithm of the bilateral Laplace transform of the probability density of its stochastic economic outcome. The internal risk aversion (IRA) is the break-even level of the absolute risk aversion, between making the project favourable or unfavourable. Below, we apply this methodology to determining an expression for the incremental risk rate of interest in the case of standard investments with payments having probability distributions. A simple approximate formula is derived explaining how the incremental risk rate of interest depends on the absolute risk aversion and the discount rate, i.e. on measures of risk preference and of time preference.

All value chains are not designed the same way. A major determinant is the type of product that is to be supplied through the chain or network, calling for different types of value chains. An interesting model for this selection is the one developed by Fisher, arguing that products can be characterised as being either functional or innovative, and that supply chains are either physically efficient or market-responsive. Certain combinations of products and supply chains are assumed to provide matches whereas other combinations lead to mismatches. This paper combines this approach with the concept of a customer order decoupling point. We distinguish between a product supply decoupling point and a demand mediation decoupling point. A decoupling point divides the value chain into two distinct parts, one upstream with certain characteristics and one downstream with distinctly different characteristics. In this paper we specifically explore how the Fisher model can be used to characterise the role and features of upstream versus downstream value chain operations relative to the product supply decoupling point and the demand mediation decoupling point. Copyright © 2006 Inderscience Enterprises Ltd.

The purpose of this paper is to analyze manufacturing networks and supply chains from an operations strategy perspective. These two areas have traditionally been treated as separate research tracks, but with the ongoing globalization of markets and operations there is a need to integrate these complementary disciplines to study networks of facilities. In this paper we examine the two research areas based on two structural decision categories in an operations strategy, viz. facilities and vertical integration. We present a typology for the analysis of network systems resulting in four basic network configurations. Coordination of activities within the network is contingent upon the configuration, thus resulting in four coordination approaches. The configuration and coordination analyzes can be used as a foundation for further research in the context of integrating manufacturing network and supply chain theory. © 2002 Elsevier Science Ltd. All rights reserved.

In developing countries, coal power plants still play a major role in the power sector and they are considered as a major emission source of air pollution. Strict regulations have compelled the coal power plants to improve environmental performance by reducing carbon emissions and the emission of pollutants. However, due to cost disadvantages, the coal power plants often lack motivation to internalize environmental externalities through investing in green technology. This situation raises a question: is there any alternative to reduce pollutants in operations economically? With a focus on service supply as well as a consideration of government policies, this paper develops a model to investigate the opportunity of outsourcing a pollutant-reduction service to meet the environmental constraint. The service supply chain consists of a coal power plant (end user) and a pollutant-reduction service provider, with the former outsourcing the service to the latter. We study the policy for improving the profit of this service supply chain whereas the benefit allotment is adjusted through outsourcing price negotiation between the two partners. The results show that the green service outsourcing price is interrelated with the government incentive policy which defines the shares of the two partners. Our key contribution lies in integrating the complex factors affecting the supply chain collaboration such as green service, financial feasibility, environmental constraint, government policies, outsourcing price negotiation, and profit sharing. Our research findings have the following implications; considering environmental externalities, the government should motivate the collaboration between supply chain partners; the economic scale of output and sales price subsidy of electricity generation are the primary factors affecting the price of outsourcing green service and, consequently, the allotment of supply chain profits. The study results indicate the collaboration is potentially e, Funding Agencies|NSFC [71372012]; National Key Research Development (973) Program of China [2013CB329101]

This paper studies a two-echelon logistics service supply chain (LSSC) composed of one logistics service integrator (LSI) and one functional logistics service provider (FLSP). We develop a two-period service capacity procurement model where market demand surges in the second period. The LSI, as the Stackelberg game leader, tends to be overconfident when market demand surges. The results show that when the demand surges in the second period, if the overconfident purchasing capacity of LSI cannot meet the market demand, the overconfidence behaviour will negatively affect LSI s optimal pricing. Besides, the overconfidence behaviour leads to the lowest service level of the FLSP in the second period under demand surge. However, such negative impacts can be reduced or even eliminated in certain conditions through the FLSP-led mechanism and the dynamic wholesale price mechanism. The numerical simulation and the case study from China are used to illustrate the model and draw some conclusions., Funding Agencies|National Natural Science Foundation of China [71672121, 71372156]; Independent Innovation Foundation of Tianjin University

In this paper, we apply the Laplace transform to risk preference theory (decision theory, decision analysis). We show that with a constant measure of absolute risk aversion, the certainty monetary equivalent (CME) can be developed into an expression involving the logarithm of the bilateral Laplace transform of the probability density of the outcome of risky projects. We also introduce a measure named internal risk aversion (IRA). This is in analogy with the earlier application of the transform to net present value problems. Properties of the CME function are examined. Basic examples of application are introduced followed by applications to portfolio theory and option pricing.

The notion of decoupling thinking has been well established in the manufacturing operations and supply chain management literature. This paper explores how this decoupling thinking can be applied in service operations and in particular in health care. It first reviews the relevant literature on decoupling fundamentals, the front- and back-office distinction, and new emerging decoupling thinking in service operations. Subsequently, a flow-based framework including content and process is developed for decoupling thinking in service operations. The framework provides an integrated perspective on customer contact, flow driver and flow differentiation (level of customisation). The framework hence, through flow differentiation, introduces the concept of standardisation versus customisation in a service context. This is followed by a health care case example to illustrate how the framework can be applied. The managerial implications are primarily in terms of a modularised approach to system design and management. The framework offers potential for benchmarking with other service systems as well as with manufacturing systems based on the shared foundation in decoupling thinking. Finally, suggestions are provided for further research opportunities derived from this research.

This paper studies the influence of the demand-supply environment on the capacity scheduling performance of the logistics service supply chain. According to the key characteristics of the demand-supply environment, the cases of five Chinese companies were introduced and cross-analysed, then research hypotheses were developed. After receiving 154 valid questionnaires and testing our hypotheses, some key conclusions were obtained. From the aspect of demand, there is a positive correlation between the customised levels of demand and the scheduling cost of logistics service integrators but a negative correlation between the customised levels of demand and the scheduling flexibility; From the aspect of supply, a higher self-support ratio of logistics source and a higher sourcing integrity of logistics service integrators will lead to a higher scheduling cost and a lower scheduling flexibility; a whole-process performance evaluation is a moderator, which will positively improve the impact of the whole process scheduling performance., Funding Agencies|National Natural Science Foundation of China [71372156, 71672121]; Humanity and Social Science Youth foundation of Ministry of Education of China [13YJC630098]; Independent Innovation Foundation of Tianjin University

Process industries of today differ from other industries in many aspects. The purpose of this paper is to consider these special properties of process industries when developing a mathematical model that can be used as a decision support tool for the supply chain planning for a chemical process industry in Sweden. A mixed-integer linear programming model is developed, and solutions to the model present how the products will be transported between the different sites of the company, the levels of the inventories, the setups and purchases from the external suppliers and also the production rates. The mathematical model takes many special properties regarding process industries into account. By using the results from the model and test different scenarios, the model can be used as an important support tool when making decisions. The decision support tool can for example be used in the company's budget process and thereby improve the chances of future profits increases., Process Industry Centre (PIC)

In this paper we develop a methodology for simultaneous recovery of the real-world probability density and liquidity premia from observed S&P500 index option prices. Assuming the existence of a numeraire portfolio for the US equity market, fair prices of derivatives under the benchmark approach can be obtained directly under the real-world measure. Under this modeling framework there exists a direct link between observed call option prices on the index and the real-world density for the underlying index. We use a novel method for estimation of option implied volatility surfaces of high quality which enables the subsequent analysis. We show that the real-world density that we recover is consistent with the observed realized dynamics of the underlying index. This admits the identication of liquidity premia embedded in option price data. We identify and estimate two separate liquidity premia embedded in S&P500 index options that are consistent with previous findings in the literature.

This paper suggests a modularized sales and operations planning (S&OP) framework, consisting of content and process. The framework’s content is based on a typology of decoupling points in which the effect of decoupling points on the decision variables in S&OP is studied. The framework’s process takes a step back and addresses the need for a more elaborate design to precede the operational use of S&OP content for different production contexts. The framework supports both process industries (PIs) and discrete manufacturing industries (DIs), and recognizes their specific requirements and reflects them in their S&OP. The differentiating characteristics of PIs and DIs are emphasized through three different decoupling points, namely: discretization decoupling point, control mode decoupling point, and customer order decoupling point. The suggested framework aims to fill the gap in the literature regarding the lack of aggregate planning processes that match the PIs’ specific requirements by reflecting the differentiating characteristics of PIs in S&OP.

Management of production activities covers a wide range of decisions. In this paper, a modularised approach is suggested that, through configuration, generates a case-specific flow design. The approach is based on identification of decision categories that are generic and fundamental in the flow design, covering both discrete manufacturing industries and process industries. Each decision category identifies a unique property of the flow which changes at a particular point: this is termed a decoupling point. A three-dimensional modularised typology is developed by combining three different decision categories. Cases from the steel industry and the tooling industry are used to illustrate how the typology can be applied. The modularised approach provides a typology for the application of both qualitative and quantitative methods for flow management, including planning, control and performance management., Funding Agencies|Swedish Foundation for Strategic Research [PIC-LI]; Process Industrial IT and Automation (PiiA) - VINNOVA; Swedish Energy Agency, Formas; Swedish industry [2014-05110]

Purpose – The purpose of this master thesis is to explore how an e-tailer selling bulky items can use a multiple criteria ABC analysis to make its purchasing process more effective, while balancing richness and reach, with the performance measurements of profitability, total asset turnover and inventory turnover. The purpose will be accomplished through a single case study on an e-tailer active on the Swedish furniture and home furnishing market. Methodology – This thesis applies a multiple criteria ABC-analysis to a single case study. The approach is semi-deductive as theory is combined with interviews on how to match and adapt theory about inventory control and purchasing with the specific requirements of an e-tailer selling bulky items. Findings – This thesis has resulted in a set of recommendations that aim to make the purchasing process of an e-tailer more effective. That is, capital and inventory space will be better allocated to the e-tailer’s more profitable items. Among other things, this thesis shows how dead articles can be identified and how a purchaser can prioritize more profitable articles over less profitable ones when making procurement decisions. The other recommendations are for the e-tailer to investigate the possibilities of decoupling the supply chain by keeping stock at the suppliers’ premises, to match the supplier reliability with their importance in the supply chain, and lastly to explore possibilities of drop shipment. Further, the main finding is that a comparison between the A-, B-, and C-classes and the reliability of the suppliers, highlights a gap and a possible risk. Put differently, the importance of a specific item for the business should be reflected in the choice of supplier and the multiple criteria ABC analysis is the tool to illustrate the importance. Keywords – E-commerce, E-tailer, richness, reach, transaction cost, ABC analysis, multiple criteria ABC, MCABC, inventory turnover ratio, supplier selection, purchasing Paper typ, Syfte – Syftet med detta examensarbete är att undersöka hur en e-handelsdetaljist som säljer skrymmande artiklar kan använda en flerdimensionell ABC-analys för att göra sin inköpsprocess mer effektiv och balansera richness och reach, med mätetal som lönsamhet, kapitalomsättningshastighet och lageromsättningshastighet. Syftet kommer att uppfyllas genom en fallstudie på en e-handelsdetaljist verksam på den svenska möbel- och heminredningsmarknaden. Metod – Denna fallstudie använder sig av en flerdimensionell ABC-analys. Tillvägagångssättet är semi-deduktivt då intervjuer och teori om hur lagerstyrning och inköp kan matchas och anpassas till ett företags specifika behov. Resultat – Den här uppsatsen har resulterat i en rad åtgärder som syftar till att göra en ehandlares inköpsprocess mer effektiv. På så vis att kapital och lageryta bättre allokeras till ehandlarens lönsamma artiklar. Bland annat visar den här uppsatsen hur döda artiklar kan identifieras och hur inköparen kan prioritera mer lönsamma artiklar över olönsamma vid inköp. De andra åtgärdena handlar om att undersöka möjligheter att frikoppla försörjningskedjan genom att lagra produkter hos leverantören, att matcha leverantörernas pålitlighet och deras betydelse i försörjningskedjan, och slutligen att utforska möjligheter att utöka drop shipment. Det främsta bidraget är att eventuella felprioriteringar och risker blir tydliga genom en jämförelse mellan A-, B- och C-klasserna och leverantörernas pålitlighet. Med andra ord bör den affärsmässiga inverkan som respektive artikel har på e-handlarens resultat avspegla sig i valet av leverantör. En flerdimensionell ABC-analys kan användas för att påvisa respektive artikels affärsmässiga inverkan. Publikationstyp – Examensarbete för utbildning till civilingenjör (masteruppsats).

Hedging of an option book in an incomplete market with transaction costs is an important problem in finance that many banks have to solve on a daily basis. In this paper, we develop a stochastic programming (SP) model for the hedging problem in a realistic setting, where all transactions take place at observed bid and ask prices. The SP model relies on a realistic modeling of the important risk factors for the application, the price of the underlying security and the volatility surface. The volatility surface is unobservable and must be estimated from a cross section of observed option quotes that contain noise and possibly arbitrage. In order to produce arbitrage-free volatility surfaces of high quality as input to the SP model, a novel non-parametric estimation method is used. The dimension of the volatility surface is infinite and in order to be able solve the problem numerically, we use discretization and principal component analysis to reduce the dimensions of the problem. Testing the model out-of-sample for options on the Swedish OMXS30 index, we show that the SP model is able to produce a hedge that has both a lower realized risk and cost compared with dynamic delta and delta-vega hedging strategies., At the time for thesis presentation publication was in status: ManuscriptAt the time for thesis presentation manuscript was named: Hedging of an Option Book at Actual Market Prices Using Stochastic Programming

The purpose of this study is to deepen the understanding of what are the underlying reasons for the increasing cost of public transport in general and bus services in particular in a Swedish context. Data were collected through in-depth interviews with managers at the bus operators as well as the authority organizations. This paper contributes by identifying nine categories that can be the dominating factors behind the increasing costs of public bus services in Sweden. The identified categories of cost drivers are; of traffic appearance (peak times), greening of buses, age requirements, the contract period, the accessibility customization, special requirements on buses, collective agreements (working time regulation), tendering and contracting process, and finally, counterproductive political governance. It can be concluded that many of the cost drivers originate from the circumstances of the process of public procurement, such as different demands for different regions in Sweden as well as the trade-off between the bus operators wishes for higher flexibility in the contracts and the traffic authorities fear of more risks and thereby higher bids in the end. (C) 2016 Elsevier Ltd. All rights reserved.

There is a need to identify and categorise different types of nonlinearities that commonly appear in supply chain dynamics models, as well as establishing suitable methods for linearising and analysing each type of nonlinearity. In this paper simplification methods to reduce model complexity and to assist in gaining system dynamics insights are suggested. Hence, an outcome is the development of more accurate simplified linear representations of complex nonlinear supply chain models. We use the highly cited Forrester production-distribution model as a benchmark supply chain system to study nonlinear control structures and apply appropriate analytical control theory methods. We then compare performances of the linearised model with numerical solutions of the original nonlinear model and with other previous research on the same model. Findings suggest that more accurate linear approximations can be found. These simplified and linearised models enhance the understanding of the system dynamics and transient responses, especially for inventory and shipment responses. A systematic method is provided for the rigorous analysis and design of nonlinear supply chain dynamics models, especially when overly simplistic linear relationship assumptions are not possible or appropriate. This is a precursor to robust control system optimisation. (C) 2015 Elsevier B.V. All rights reserved.

Negative impacts on environment such as carbon emissions and pollution resulting from the business activities of firms in a supply chain have attracted great attention worldwide. Hence, one of the crucial issues for supply chain management is the trade-off between economic objectives and environmental sustainability. This paper focuses on investigating the government policy incentive mechanism, with which supply chain members are motivated to work collaboratively to reduce carbon and pollutant emissions by investing in producing environmental-friendly products (EFP). Such a mechanism affects the transfer price through negotiation between the supply chain firms, and consequently it has an impact on the supply chains value transition and profit allocation. A collaborative supply chain decision-making framework is formulated with environmental constraints and carbon caps; its objective is to maximize the net present value of an integrated supply chain as well as satisfy the interests of its individual members. Our key contribution lies in exploring a decision-making mechanism for an environmentally sustainable supply chain that is jointly constrained by environmental carrying capacities and carbon caps, and also takes into account government policy incentives. The results show that collaboration between supply chain members plays a crucial role in improving their environmental performance, as the transfer price is determined through negotiations to share government subsidies to satisfy the individual interests of supply chain members while the level of pollutants and carbon emissions are in compliance with environmental standards.(C) 2016 Elsevier B.V. All rights reserved.

Cores are essential for the remanufacturing business. The lack of cores with proper quality is reported as a highly ranked factor that limits both third party and OEM (Original Equipment Manufacturer) remanufacturers. To encourage the return of quality cores, in practice it is common for OEMs to charge a certain amount of deposit, and refund it fully or partially depending on the quality of cores during the return process. Furthermore, the core quality varies and leads to different remanufacturing costs. The core refund policy should reflect such differences, in order to encourage the customers to return the cores with “correct” quality. In this paper, we propose three refund policies and develop profit maximization model for the remanufacturer. Under the assumption of quality following a uniform distribution, we develop analytical solutions for the refund policies and principles for quality partition. Numerical examples indicate that the customers׳ valuation of core is an important factor influencing the return rates and the economics performance of the system as well. Multiple refund policy with a small number of quality classes already brings major advantages, even with a market where the competition for collecting cores is relatively high. The study is also extended to the cases that core quality follows an adjusted normal distribution. Credit refund policies are also studied for comparison purpose.

This dissertation is centered around two comprehensive themes: the extraction of information embedded in equity index option prices, and how to use this information in order to be able to make optimal decisions in the equity index option markets. These problems are important for decision makers in the equity index options markets, since they are continuously faced with making decisions under uncertainty given observed market prices. The methods developed in this dissertation provide robust tools that can be used by practitioners in order to improve the quality of the decisions that they make. In order to be able to extract information embedded in option prices, the dissertation develops two different methods for estimation of stable option implied surfaces which are consistent with observed market prices. This is a difficult and ill-posed inverse problem which is complicated by the fact that observed option prices contain a large amount of noise stemming from market micro structure effects. Producing estimated surfaces that are stable over time is important since otherwise risk measurement of derivatives portfolios, pricing of exotic options and calculation of hedge parameters will be prone to include significant errors. The first method that we develop leads to an optimization problem which is formulated as a convex quadratic program with linear constraints which can be solved very efficiently. The second estimation method that we develop in the dissertation makes it possible to produce local volatility surfaces of high quality, which are consistent with market prices and stable over time. The high quality of the surfaces estimated with the second method is the crucial input to the research which has resulted in the last three papers of the dissertation. The stability of the estimated local volatility surfaces makes it possible to build a realistic dynamic model for the equity index derivatives market. This model forms the basis for the stochastic programming (SP)

Realizing the importance of remanufacturing for sustainable development due to the large scale of the economy and its increasing pressure on the environment, the Chinese government has been strongly promoting its remanufacturing industry since 2008. The objective of this paper is to identify the motives and barriers for remanufacturing in China. According to the survey conducted among remanufacturers in China, environmental and ethical responsibility, customer orientation and strategic advantage are the three most important motives, while customer recognition is the most serious barrier at present. This survey also shows that there are many differences between car part and machinery remanufacturers in China. For example, car part remanufacturers are more motivated by subsidies, at the same time, they are also more restricted by legislation, while lack of sales channels is a more serious barrier for the machinery remanufacturers. The differences exist partly due to the Chinese remanufacturing environment, for example the policies from different government departments that regulate the related industries. Suggestions for improving the remanufacturing industry, in particular from the policy makers’ perspective, are provided according to the survey results.

The relationship between environmental management practices (EMPs) and company performance hasrecently been debated in literature and is of interest for both industrial managers and political decisionmakers.This paper investigates the relationship between EMPs and firm performance in manufacturingcompanies in Sweden, China and India. With the content analysis of Global Reporting Initiative (GRI)reports and financial reports of sample companies, the levels of EMPs and the companies’ financialperformances were coded. Further statistical assessment was conducted in order to identify patterns andcorrelations. The results indicate that only selected EMPs have been employed differently in threedifferent countries. Most EMPs clearly do not have a positive correlation with the financial performance;i.e. employing EMPs does not necessarily improve the economic consequence of companies. Nevertheless,a number of EMPs do have a strong correlation with improving innovation performance in variouscompanies. It is also interesting to note that a negative correlation exists between the Environmentalstandard for suppliers and Sales growth. This is possibly due to increasing operational costs and a delay inmarket acceptance. This research illustrates the possibility of using standard environmental data fromGRI reports as a resource for future studies of EMPs. In order to improve long-term financial performance,this study also suggests that innovation should gain a substantial amount of attention when EMPsare employed.

Whether the corporate social performance affects the financial performance is still unclear in many manufacturing companies. We commonly expect, on one side, that profitable corporations have stronger incentives to reveal information on social performance in order to improve their publicity; on the other hand, companies may face the fear of rising costs due to Corporate Social Responsibility (CSR) activities. With increasing concerns of CSR, it is timely to investigate the relationship between the disclosure of corporate social performance and financial performance. In this paper with the above study objective, we use Global Reporting Initiative (GRI) reports of 75 sample companies, collect evidences by applying the method of structured content analysis of the cases and attempt to identify this relationship. The corporate social performance is measured by the indicators according to the GRI guidelines, i.e. within the categories of Labor practices and decent work, Human Rights, Society as well as Product responsibility. Financial performance is measured by return on equity, sales growth and cash flow/sales ratio. Using statistical evaluation methods, our results indicate that the categories of Human Rights, Society as well as Product responsibility display a significant and positive correlation with the return on equity. Same conclusion also holds for many CSR indicators. Nevertheless, when examining the CSR practices across different manufacturing sectors, we have not observed significant differences. The study results are important for understanding the development and implementation of CSR practices in the manufacturing industry.

Acquisition of cores is important for the success of remanufacturing business, but evaluating the value of cores is difficult due to many uncertain issues in the remanufacturing system. In this paper, we examine the value of cores using the real option valuation (ROV) approach, which well captures the production flexibility and represents different operations options in remanufacturing. First, in a system where the demand of remanufactured products is low, we focus on the uncertainty of price. We compare the cases where disposing cores occurs only at the expiration time and before that. The model also identifies under which circumstances disposing core early brings in more benefit. Furthermore, we study a remanufacturing system where demand and return are both uncertain. In this case, a spread option is used for evaluating the marginal value of obtaining additional cores. This approach also brings the advantage of linking the correlation between demand and return, which in fact is often exhibited in remanufacturing. The numerical experiments indicate that this correlation has an impact on collecting policies. This study illustrates the possibility of using ROV for core pricing modelling, and the study results also provide some managerial insights in managing returned cores.

We study inventory rationing in a system with multiple demand classes and lost sales. It is assumed to have at most one outstanding order, resulting in two periods in an order cycle separated by the time of order release. We review the most related work by Melchiors (2001, PhD Thesis, University of Aarhus; 2003, International Journal of Production Economics 81-82, 461-468), and find that the existing approximated and optimal policies are not easy to obtain due to computational complexity. Also as the rationing issue before order release is not well addressed in literature, in this paper we have proved the static rationing being optimal. Furthermore in such a system with two distinct periods, the optimal rationing policy is a combination of a dynamic policy during the replenishment lead time and a static policy before order release. In order to make the rationing policies to be readily used in practice, we introduce two approximated methods for calculating the rationing levels in two periods, respectively. The results, in particular the combination of static and dynamic rationing, outperform the existing approximations in literature. In addition, the computation is obviously simplified due to the efficient algorithm of dynamic rationing and the explicit expressions of static rationing.

Maintenance aims to ensure the availability and reliability of equipment so that production processes keep operations, and products sustain with good qualities. However, maintenance decisions rely essentially on the distribution of product’s lifetime. For instance, professional users may use machine tools intensively, whereas as hobby users, the usage of same tools is much less frequent. This variability poses a challenge for companies when adopting product-service offerings, as the maintenance policies should differ to minimise the number of unexpected failures as well as the product life cycle usage costs. This study investigates the identification of customer usage behaviour groups in mixed Weibull distributed product failure datasets. The study proposes an algorithmic model using the Weibull moments to distinguish the underlying Weibull distribution in a mixed distribution. The developed knowledge defines whether customer usage data needs to be distinguished between groups., RE:Think (Rethink and improve product design and service cost for circular economy business models)

Generally, the cost of public transport has increased. Previous research has identified peak hour traffic as the main cost driver, mostly because the travel demand increases the number of vehicles and drivers needed. The purpose of this study is to identify measures aiming to reduce travel with public transport during peak hours, conducted through a semi-systematic literature review. The measures found were fare price differentiation, rewards, information regarding vehicle crowding, staggered school hours, flexible working hours, and working remotely. No studies of soft measures (e.g., campaigns and travel advice) for transport demand management were found. The results indicate that commuters with flexible working hours might have limiting factors that affect their ability to change departure time, for example, activities in connection to work and family responsibilities.

To make a difference among the energy intensive process industries, this dissertation addresses production planning and supply chain planning problems related to industrial energy management issues. The energy issue is turning more and more important from different angles, involving price as well as environmental problems due to climate change leading to political pressure on all energy users. The process industry sector is one of the largest users of energy, and thus important to analyse. Process industries are also capital intensive and operate on large and expensive process equipment, making it imperative to plan their production well in order to reach preferable capacity utilisation. Therefore this dissertation strives to locate the most important energy management issues for the long term profitability of process industries, and investigates the symbiotic effects of including energy issues in production and supply chain planning. Three different studies at three case companies are carried out, analysed, and presented in five papers. The cases represent the process industry sectors: chemicals, pulp, and steel. Both qualitative case study methodologies as well as quantitative mathematical modelling and optimisation approaches have been practiced. The research questions are analysed from both an energy system and from a production process point of view, separately as well as combined. Energy is somewhat considered to be the main workforce for process industries and this dissertation exemplifies some of its most important dimensions in this context. Several prerequisites for putting energy management on the strategic agenda are located in a specialty chemical industry where the importance of introducing a strategic perspective on energy, the way energy is used, and the possibilities of increasing alternative revenue from utilising by- and/or co-products differently are pinpointed. Approaches for including energy issues in planning processes are also suggested in t

The perspectives on the manufacturing footprint of global firms are widening from the economic aspects to also include the environmental and social aspects. Thus, sustainability is becoming an important issue for the location of manufacturing facilities. It is therefore timely to review the relevant aspects and dimensions in the extant literature to investigate the relationship between sustainability and facility location. In this paper, we aim to understand how sustainability aspects are included in decision-making concerning manufacturing facility locations and the role of location in evaluating manufacturing sustainability. We examine the literature streams on sustainability and facility location. A comprehensive search includes peer-reviewed literature from 1990 to 2011. We propose a literature classification scheme with respect to focal area and research methodology. The content analysis identifies the environmental, social and economic perspectives and factors affecting location decisions. We synthesize the findings into a framework for taking sustainability aspects into account in manufacturing facility location decision-making. We also propose a research agenda for further research on sustainable locations.

Managers and researchers are increasingly interested in the factor that logistics enterprise competitiveness(LEC) has significant effects on the development of Chinese logistics enterprises, especially in view of theenterprise life cycle. This paper investigates the contents and evolution of the composing factors of LEC inChina by a survey.With Statistical Product and Service Solutions (SPSS 15.0) software, the factor analysismethod is used to determine the effects of each factor on LEC. Furthermore, the comparative analysismethod is applied to compare the composing factors of LEC in different types of logistics enterprises andat different enterprise life cycle stages. The results show that factors of LEC according to their descendingimportance level are corporate capabilities, corporate resources, and dynamic mechanism. Three kindsof corporate capabilities (financial management capability, logistics risk control capability, and humanresource management capability) and two kinds of corporate resources (corporate human resources andcorporate culture) have the greatest influence on the development of LEC, but in reality have poor practicalperformance, and hence deserve more consideration from the enterprises., National Natural Science Foundation of China, Humanity and Social ScienceYouth Foundation of Ministry of Education of China, China State Scholarship Fund, China State Scholarship Fund

The dynamic lotsizing problem concerns the determination of optimal batch quantities, when given required amounts appear at discrete points in time. The standard formulation assumes that no shortages are allowed and that replenishments are made instantaneously. For the case when no shortage is allowed, previously it has been demonstrated that the inner-corner condition for an optimal production plan in continuous time reduces the number of possible replenishment times to a finite set of given points at which either a replenishment is made, or not. The problem is thus turned into choosing from a set of zero/one decisions with 2n−1 alternatives, of which at least one solution must be optimal, where n is the number of requirement events. Recently, the instantaneous replenishment assumption has been replaced by allowing for a finite production rate, which turned the inner-corner condition into a condition of tangency between the cumulative demand staircase and cumulative production. In this paper we investigate relationships between optimal cumulative production and cumulative demand, when backlogging is permitted. The production rate is assumed constant and cumulative production will then be a set of consecutive ramps. Cumulative demand is a given staircase function. The net present value (NPV) principle is applied, assuming a fixed setup cost for each ramp, a unit production cost for each item produced and a unit revenue for each item sold at the time it is delivered. Among other results, it is shown that optimal cumulative production necessarily intersects the demand staircase. Instead of having 2n−1 production staircases as candidates for optimality, there are 2n−1 production structures as candidates. These are made up of sequences of batches, of which the set of batches may be optimised individually. Also is shown that the NPV of each batch has a unique timing maximum and behaves initially in a concave way and ends as convex. Results for the average cost approach a

Process industries has for long been important for the development of Swedish industry and society. All industries face different conditions that affect how to best run their operations. This thesis aims to describe some of the conditions that characterize process industries compared to other industries. Further one of these characteristics has been studied more closely. One of the traits of process industries is that they are positioned at the start of the transformation process close to the raw material mixing, separating or forming it into products often used for further transformation. Process industries hence become dependent on the properties of these materials. One of the most prominent characteristics inherent from the raw material properties is the divergent bill of material. The divergent bill of material originates from the fact that a given raw material is made up of different components that will yield several products with different characteristics when processed. When splitting the raw material into the desired products the yielded products from a certain raw material usually have different value to the producer, some more desired than others. These multiple products generated poses a challenge from a planning perspective raising questions like “How should we balance the supply and demand of all the products produced?”, “What shall we do with the excess products produced?”. The first paper in this thesis describe the production planning in four Swedish process industries with the ultimate aim to connect their planning to the supply chain characteristics they face as process industries. The study concludes that the industry specific conditions mainly affect planning at short time ranges when planning becomes more detailed. In general the use of planning or decision support systems is low, stemming from a, warranted or not, belief that general decision support systems do not fit process industries. Another finding is that the case companies mainly opera, Processindustrier har länge varit viktiga för utvecklingen av svensk industri och det svenska samhället. Alla branscher möter olika förutsättningar som påverkar hur verksamheten bäst skall drivas. Avhandlingen syftar till att beskriva några av de villkor som kännetecknar processindustrin jämfört med andra branscher. Slutligen har en av dessa kännetecknande egenskaper studerats närmare. En av de egenskaper som utmärker processindustrier är att de är positionerade vid början av omvandlingsprocessen nära råvaran och blandar, separerar eller formar den till produkter som ofta används för ytterligare förädling. Processindustrin blir därmed beroende av egenskaperna hos råmaterialet som används. En av de mest framträdande egenskaperna härrörande från dessa råmaterialegenskaper är det divergenta materialflödet. Det divergerande materialflödet har sitt ursprung i att ett visst råmaterial består av olika komponenter som ger flera produkter med olika egenskaper. När råmaterialet separeras i sina komponenter erhålls flera produkter som kan ha väldigt olika värde för producenten. Efterfrågan på de produkter som erhålls ur separeringen kan vara vitt skild från vad som erhålls ur produktionsprocessen. Denna obalans mellan efterfrågan och försörjning är en utmaning ur ett planeringsperspektiv och väcker frågor som " Hur ska efterfrågan och försörjning av de produkter som produceras balanseras?", "Hur skall överskottet på vissa produkter hanteras? ". Den första artikeln i denna avhandling beskriver produktionsplaneringen i fyra svenska processindustriföretag inom områdena pappersmassa, specialkemi, specialoljor samt papper och pappersmassa. Målet med studien var att jämföra planeringen av försörjningskedjan med de förutsättningar som processindustrin ställs inför. I studien dras slutsatsen att de branschspecifika förhållandena främst påverkar den kortsiktiga planeringen med mer detaljer. I allmänhet verkar användningen av planerings- eller beslutsstödsystem vara låg, som härrör från

How can a different planning of production and supply chain increase energy efficiency and effectiveness? This descriptive and rather exploratory case study investigates these possibilities by mapping the production system and its supporting energy system at a steel company’s production site. Several possibilities for improvement in the planning processes have been located and evaluated. Our findings resulted in identifying four different improvement areas: 1) planning slab furnaces, 2) utilizing embedded heat and shortening lead times, 3) broader frame when scheduling for decreasing waste at set-ups, and 4) demandresponse opportunities related to electricity price variations. The first improvement area: planning of the slab furnaces, shows the largest potential, both in terms of energy savings and reduced costs. The second and the third improvement areas are similar to each other in terms of potential energy savings, but if the lead-time also could be decreased in the second it would be more economically beneficial than the other. Additional possibilities are found in the fourth improvement area where electricity demand response actions by rescheduling the energy-intensive production into times of low electricity price might save electricity costs. To conclude, the company could reach both higher energy efficiency and profitability simultaneously, by utilizing the energy- and the production systems combined in a more efficient and effective way., An earlier version of this paper was presented at IWSPE18 2014.

This paper examines a periodic-reviewed lot sizing problem with random yields, disruptions and limited inventory capacity. To characterise the continuous production, an additive random yield model is considered rather than a multiplicative one. Disruptions cause breakdowns to production. Inventory capacity is included since the production has to be shut down when the inventory buffer is full. Both disruptions and shutdowns lead to a start-up cost and a stochastic lead time to recover the production. These compound factors of uncertainty are encountered in practical planning decisions in process industries. We review the existing random yield models, which are then compared with the additive model. With a linear production cost, the additive model has an order-up-to policy to be optimal. Disruptions deteriorate the expected actual production quantity and the fill-rate dramatically, even though the optimal order-up-to level increases compared with the cases of no disruption. Considering inventory capacity makes the problem to be a non-convex dynamic programming problem. Numerical analysis shows that the performance is dramatically deteriorated when the inventory capacity is rather tight, which indicates the importance of selecting a proper inventory capacity to reduce the negative impacts and avoid redundant investment on capacity. Moreover, the start-up cost plays an important role in determining the level of inventory capacity., Funding Agencies|Swedish Foundation for Strategic Research (SSF)

It has been anticipated that energy management will gain increased interest amongst companies in a near future. Yet, even in energy-intensive companies, like process industries, energy management is seldom treated strategically. The purpose of this study is thus to investigate the necessary prerequisites for putting energy management on the strategic agenda in energy-intensive process industries. This is done by the means of a literature review and a case study, and the analysis is based on how energy management is treated from three perspectives; a strategic perspective, an energy system utilisation perspective, and an alternative revenue perspective. The case study shows, similar to other process industry companies, that the strategic importance of energy management, to a large extent, is neglected. The research also indicates necessary prerequisites, for each perspective, for highlighting the strategic importance of energy management for a typical company in the process industry sector., An earlier version of this paper was presented at EurOMA 2010, 6-9 June, Porto, Portugal.

This thesis addresses industrial energy issues from a production economic perspective. During the past decade, the energy issue has become more important, partly due to rising energy prices in general, but also from a political pressure on environmental awareness concerning the problems with climate change. As a large user of energy the industry sector is most likely responsible for a lot of these problems. Things need to change and are most likely to do so considering current and assumed future governmental regulations. Thus, the energy intensive process industries studied and focused on in this thesis exemplify the importance of introducing a strategic perspective on energy, an appropriate approach for planning, as well as the possibilities of including energy issues in a production and supply chain planning model. The thesis aims to provide models, methods and decision support tools for energy related production and supply chain planning issues of relevance for process industries as well as for other energy intensive industries. The overall objectives are to analyze the strategic importance of energy management, production and supply chain planning, and the opportunities provided when energy is included in a production and supply chain planning model. Three different studies are carried out, analyzed, and presented as in this thesis. The first study is a case study at a specialty chemicals company and resulted in the first paper. Since the energy issue is not only a cost issue driven by supply and demand, but also a political issue due to its environmental aspects, it is likely to believe that political influence and especially continuity will have escalating effect on the energy intensive process industry sector. Thus, the strategic dimension of energy is highly relevant in this thesis. The importance of organizational integration, having a main responsible person, locating core business, and political continuity are addressed as prerequisites for including ener

The purpose of this paper is to investigate the research development in supply chain risk management (SCRM), which has shown an increasing global attention in recent years. Literature survey and citation/co-citation analysis are used to fulfil the research task. Literature survey has undertaken a thorough search of articles on selected journals relevant to supply chain operations management. Meanwhile, citation/co-citation analysis uses Web of Sciences database to disclose SCRM development between 1995 and 2009. Both the approaches show similar trends of rising publications over the past 15 years. This review has piloted us to identify and classify the potential risk associated with different flows, namely material, cash and information flows. Consequently, we identify some research gaps. Even though there is a pressing need and awareness of SCRM from industrial aspect, quantitative models in the field are relatively lacking and information flow risk has received less attention. It is also interesting to observe the evolutions and advancements of SCRM discipline. One finding is that the intellectual structure of the field made statistically significant increase during 2000-2005 and evolved from passively reacting to vague general issues of disruptions towards more proactively managing supply chain risk from system perspectives.

MRP Theory combines the use of Input-Output Analysis and Laplace transforms, enabling the development of a theoretical background for multi-level, multi-stage production-inventory systems together with their economic evaluation, in particular applying the Net Present Value principle (NPV) In this paper we concentrate our attention on the question of optimal lotsizing decisions within the MRP Theory framework. MRP Theory has mainly dealt with assembly structures by which items produced downstream (on a higher level in the product structure) contain one or more sub-items on lower levels, but at each stage, the assembly activity produces only one type of output. This enables the input matrix, after enumerating all items suitably, to be organised as a triangular matrix, with non-zero elements only appearing below its main diagonal. The introduction of a diagonal lead time matrix capturing the advanced timing when required Inputs are needed, enables compact expressions to be obtained, explaining the development of key variables such as available inventory and backlogs in the frequency domain. Central in this theory is the generalised input matrix showing when and how much the internal (dependent) demand amounts to for any production plan. Previously has been demonstrated that in a one-product case, inner-corner conditions for an optimum production plan in continuous time reduce the number of possible replenishment times to a finite set of given points at which either a replenishment is made, or not. The dynamic lotsizing problem is thus turned into choosing from a set of zero-one decisions with 2(m-1) alternatives, of which one (or possibly several equivalent) solution(s) must be optimal, where m is the number of requirement (demand) events. Given these points in time and the corresponding staircase function describing cumulative demand, the optimal plan may be obtained, for instance by employing the Triple Algorithm of dynamic lotsizing. This applies either an Average C

The supply chain operations reference (SCOR) model is developed and maintained by the supply chain council (SCC). The SCOR model is a reference model that can be used to map, benchmark, and improve supply chain operations. SCOR provides companies with a basic process modelling tool, an extensive benchmark database, and defines a set of Supply chain metrics. The software ARENA is a commercial simulation tool that can be used for simulation modelling in various applications. An integration of SCOR and ARENA provides the Supply Chain analyst with a comprehensive and dynamic tool. This paper reports oil the ongoing work to integrate the SCOR methodology and a discrete event simulation tool. SCOR is basically used to study the static operations of a supply chain. However, there is also a need to study the dynamic effects e.g. of changes in production rate, poor quality in raw materials, and other effects related to the "bullwhip" behaviour of a supply chain.

The purpose of the paper is to explore the way manufacturing firms use internal and external suppliers in the design and management of manufacturing networks. The main area of interest is to explore the similarities and differences between internal and external suppliers, with respect to their roles and the reasons for choosing a certain type of supplier. We base our analysis on data from 104 Swedish manufacturing plants and their corresponding manufacturing networks of internal and external suppliers. The results of the study show that there are significant differences between the criteria that are influential in choosing a certain type of supplier. The choice of an internal supplier is largely based on a single corporate decision, while an external supplier has to perform well on a number of criteria (primarily quality, cost, and delivery dependability). When comparing the selection criteria with competitive priorities and plant performance, we find that the criteria for selecting external suppliers has a better match than those for selecting internal suppliers. The sample contained plants having only external suppliers as well as plants having both internal and external suppliers, but the selection criteria for external suppliers are the same for both groups and not dependent upon the presence or absence of internal suppliers., PROFIL (Vinnova)

In this paper we evaluate the density forecasts obtained from a cross-section of S&P 500 index option prices. The option implied density forecasts rely on a result derived by Heath and Platen (2006), which under certain assumptions allows us to transform risk-neutral densities into real-world densities. In order to remove liquidity premia from the real-world densities we use a transformation into densities implied by the Minimal Market Model. The accuracy of the estimated real-world density forecasts relies on using a recently developed method for estimation of risk-neutral densities of high quality. We find that our recovered real-world densities explains the realized return distribution for S&P 500 better than historical GARCH densities for a forecasting horizon of two days. This can be contrasted to the findings in two recent papers in the literature, who find that historical densities estimated from intra-day data performs as least as well as option implied densities for a forecasting horizon of one day.

The ongoing fourth industrial revolution, also known as Industry 4.0 (I4.0), permeates the worldwide economies of most industrialized areas. From the shop floor to the research & innovation level, a critical mass of knowledge workers is required to benefit from the great, mostly unexplored, potentialities of I4.0 technologies. Educating a critical mass of thousands of knowledge / talented workers is the most extensive higher education challenge Europe is facing. An increasing qualitative and quantitative gap between demand and supply of knowledge workers is threatening the chance of success of the re-industrialization of Europe. The main objective of the IE3 project is to design and test innovative courses in Industrial Engineering and Management (IE&M). By introducing cutting-edge learning techniques and tools, the project will support the future generation of knowledge workers. Testing and sharing pilot solutions by the IE3 project will systematically support the development, updating, or re-design of university courses/programs in IE&M throughout Europe. The Body of Knowledge (BoK) for Higher Education in Industrial Engineering and Management is the reference document to support conceptual and implementation processes of designing, updating, or re-designing university master-level programs or course modules in IE&M. The BoK defines Guidelines supporting the renewal processes of IE&M master-level education in Europe and disseminates IE3 project outcomes, giving value to practical experience carried out by project partners during the project development. The BoK is not only a methodology, but it represents the foundation upon which Higher Education Institutions (HEIs) can develop their strategies, policies, procedures, and tools to renew courses and programs in an evolving environment. The Bok refers to contents and knowledge constantly evolving according to a rolling re-design approach.

To sustain competitiveness in the automotive industry, industrial companies seek new ways of increasing and improving efficiency and flexibility of their production systems. By embracing the shift towards smart factories, industrial companies need to consider both short term and long-term investments. When implementing digitalized solutions, automotive factories need to understand what initiatives that need to be made, and when. This case study is done at Scania CV AB in Oskarshamn, and more specifically in the logistics department inside the main assembly. As Scania forecasts a growing demand of their products, the company needs to increase their internal delivery capacity and requires an improved product and process quality on a long-term basis using digital technology. Based on this problem, the purpose of this study is to analyse how digitalization will affect the current manufacturing strategy and how digitalization may improve the current manufacturing strategy. The results of the case study show that Scania CV AB in Oskarshamn should start to implement digitalization by introducing compatible technologies and by changing their organization structure. A roadmap is presented suggesting short-term and long-term objectives that links digitalization to manufacturing strategy of the case study.