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Assessing the benefits of labelling postponement in an export-focused winery

Author

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  • Mauricio Varas
  • Sergio Maturana
  • Susan Cholette
  • Alejandro Mac Cawley
  • Franco Basso

Abstract

Supporting wine production operations in an increasingly global market has grown ever more challenging. Export-focused wineries supply many foreign clients, often requiring different labels for the same kind of wine. Order forecasts tend to be highly inaccurate, and wineries must be able to quickly react to changes, making lot-sizing an important consideration. One tool to reduce product misallocation is postponing product differentiation, where the natural decoupling point for premium wine is the labelling process. However, the double handling involved incurs additional costs and time penalties. We analyse the performance impact of postponing the labelling of bottled wines by developing a multi-stage mixed-integer stochastic programming model with full recourse for demand scenarios. The underlying data and policies are based on an unnamed Chilean export-focused winery. The model supports lot-sizing under several winery production policies. We experiment with different levels of capacity tightness, demand variability and demand correlation between wines, optimising for reducing order backlogs, inventory levels and line set-ups. While we find that some amount of postponement will always be recommended, the exact mix and degree depend on these external factors. Postponement has the most benefits when production capacity is moderately tight, demand variability is high and wines have negatively correlated demands.

Suggested Citation

  • Mauricio Varas & Sergio Maturana & Susan Cholette & Alejandro Mac Cawley & Franco Basso, 2018. "Assessing the benefits of labelling postponement in an export-focused winery," International Journal of Production Research, Taylor & Francis Journals, vol. 56(12), pages 4132-4151, June.
    • Handle: RePEc:taf:tprsxx:v:56:y:2018:i:12:p:4132-4151
    DOI: 10.1080/00207543.2018.1431415
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    Citations

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    Cited by:

    1. Basso, Franco & Guajardo, Mario & Varas, Mauricio, 2020. "Collaborative job scheduling in the wine bottling process," Omega, Elsevier, vol. 91(C).
    2. Iftikhar, Ilaria Giannoccaro & Anas, 2023. "Mitigating ripple effect in supply networks: the effect of trust and topology on resilience," OSF Preprints 2spt3, Center for Open Science.
    3. Mauricio Varas & Franco Basso & Armin Lüer-Villagra & Alejandro Mac Cawley & Sergio Maturana, 2019. "Managing premium wines using an $$(s - 1,s)$$ ( s - 1 , s ) inventory policy: a heuristic solution approach," Annals of Operations Research, Springer, vol. 280(1), pages 351-376, September.
    4. Franco Basso & Juan Pablo Contreras & Raúl Pezoa & Alejandro Troncozo & Mauricio Varas, 2023. "Optimizing the wine transportation process from bottling plants to ports," Operational Research, Springer, vol. 23(2), pages 1-28, June.
    5. Mac Cawley, Alejandro & Maturana, Sergio & Pascual, Rodrigo & Tortorella, Guilherme Luz, 2022. "Scheduling wine bottling operations with multiple lines and sequence-dependent set-up times: Robust formulation and a decomposition solution approach," European Journal of Operational Research, Elsevier, vol. 303(2), pages 819-839.

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