Mathematical method for calculating batch fragmentations and their impacts on product recall within a FIFO assignment policy

Abstract

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.