Mathematical method for calculating batch fragmentations and their impacts on product recall within a FIFO assignment policy
For supply chain managers, this provides a novel method to reduce recall risk by considering batch fragmentation in batch sizing decisions.
This paper proposes a new indicator (FrBO) to quantify batch fragmentation and a new equation to calculate expected recall size under FIFO assignment, validated via Monte Carlo simulation, enabling proactive recall policy integration into batch sizing decisions.
This study explores the interactions between order sizes, batch sizes and potential product recalls within a FIFO assignment policy. Evidence is provided that the extent of a product recall is related to the fragmentation of the batches of input materials as it amplifies the impact of a crisis. A new management indicator is proposed in order to quantify the expected number of fragments composing a customer order FrBO. A probabilistic analysis reveals that for a given likelihood of crisis, the presence of different batches in a customer order will largely increase its risk. Accordingly, a new equation is proposed for calculating the expected recall size. Taking into account the fragmentation measure allows, for the first time, for the integration of a proactive product recall policy in the batch sizing decision process. A Monte Carlo simulation is performed to validate the effectiveness of this approach.