Disruption Management: Framework, Models And Applications

Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. DISRUPTION MANAGEMENT: FRAMEWORK, MODELS AND APPLICATIONS Copyright © 2004 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. ISBN 981-256-017-3 Printed in Singapore. May 21, 2004 8:33 WSPC/Book Trim Size for 9in x 6in Preface Uncertainty is an intrinsic and pervasive property that fittingly characterizes the very nature of the world we live in. Uncertainty makes the world dynamic, vibrant, and complex. Uncertainty exists everywhere and it poses tremendous challenges to human decision makers. Uncertainty causes disruptions to an operational plan and it makes the smooth execution of a perfect plan difficult and, perhaps, even to fall apart. Uncertainty is hardly avoidable or preventable. Thus, we must face it. We can hedge against it, design strategies to cope with it, reduce its negative consequences, and even use it to our advantage. Disruption management is a methodology that copes with disruptions in real time. During the past decade, we have seen a flourish of research and applications in the area of disruption management. The initial value was achieved in the airline industry. The successful implementation and usage of a decision support system for disruption management saved several major airlines in the United States tens of millions of dollars annually together with improved on-time performance and better customer service. Recently more research has been conducted on disruption management in the area of production management, inventory control, supply chain coordination, machine scheduling, telecommunication routing, and project management. These studies have demonstrated that 1) Disruption management has a broad range of applications; 2) Disruption management problems can be effectively modeled and solved; and 3) Disruption management can create remarkable values and impact. vii book May 21, 2004 8:33 viii WSPC/Book Trim Size for 9in x 6in book Disruption Management: Framework, Models and Applications The targeted audiences of our book are researchers in the area of operations research/management and practitioners in charge of operations control. We intend to write every chapter of the book in a self-contained manner so that readers who are interested in specific areas need only read the relevant chapters. We illustrate v