International Journal of Sales & Marketing

Management Research and Development (IJSMMRD)

ISSN (P): 2249-6939; ISSN (E): 2249-8044
Vol. 5, Issue 3, Jun 2015, 25-32
TJPRC Pvt. Ltd.

RELEVANCE OF FACTORIAL EXPERIMENT IN SUPPLY CHAIN

MANAGEMENT SYSTEM
KEERTI JAIN1, VINEETA SINGH2 & VISHAL JAIN3
1

Assistant Professor, School of Engineering, G. D. Goenka University, Sohna, Gurgaon,

Haryana, India

Professor and Head, Department of Statistics, Institute of Social Science, B. R .Ambedkar University
Agra, Uttar Pradesh, India
3

AVP, Straightway Propmart, Gurgoan, Haryana, India

ABSTRACT
This research paper focuses on using confounding an efficient tool of factorial experiment of design of
experiments (DoE) to optimize the facility layout in supply chain management. The critical factors that impact the
performance metrics of cycle time, work-in-process and throughput can be identified by using confounding in factorial
experiment. These experiments can be conducted in real world as well as, simulation models, which are used to evaluate
the various what-if scenarios.

KEYWORDS: Supply Chain Management, Stimulation Model, Factorial Experiment, Confounding

INTRODUCTION
Nowadays enterprisers, facing intensifying competition and pressure for higher levels of customer service are
compelled to continuously improve their supply chain management. Most of these enterprises use Six sigma, Lean six
sigma, TQM Philosophy, but these can be applicable only when loop poles of the system were identified. For example, Six
sigma[1, 2 &3] is a business process by which waste or defects are removed by focusing on process or outputs important to
the customer, supply chain management is used to reduce the time as well as cost of transportation. The steps of Six Sigma
process are termed as DMAIC - Define, Measure, Analyze, Improve and Control. Likewise Lean manufacturing is also a
business process by which waste is eliminated. CTQ (Critical to quality) needs that the customer has in deeming the
product quality, KP IV - Key process input variables, KPOV - Key process output variables [4, 5 & 6].
In all these techniques lots of statistical tools are used to find the important variables effecting the system. Before
launching any new system, entrepreneurs are also adopting the stimulation technique. This helps to design an efficient and
effective facility layout of new proposed systems in the virtual environment, all this is the part of stimulation. Experiments
in different manner and different situation and with different variables or with different combinations of variable are
performed on the stimulation models.
Some experiment requires further improvements, few are satisfactory, and some are not even feasible in real
environment and can be considerably improved. A large number of experiment would be needed before any reliance or
conclusion. For every particular experiment a hypothesis is designed. The experiment would be improved if, except for the
factor under observation, all the other factors known to affect the same factor were kept constant or under control. The
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Keerti Jain, Vineeta Singh & Vishal Jain

observations obtained from such a controlled experiment could then be used to verify the hypothesis of direct
proportionality.Any disagreement between the observations and the hypothesis would suggest either that the hypothesis
should be discarded or some other assignable causes have to be looked for. A modified hypothesis can be set up, these
modification may be the inclusion of few more factors to be controlled or, a change in the functional relationship assumed
and the experiment is re-planned. The cycle of hypothesis, experiment, observation, analysis is repeated till a satisfactory
conclusion is reached, satisfactory does not mean any absolute sense but only relative to the standards set for the purposeof
the experiment.
In supply chain system experiment, the difference in performance of the companies depends upon location and
distance of inventory of raw material, finished product, repair centers, warehouse, transport destination, mode of transport,
route of transport, location of factories etc., these are considered as factors. Other than these factors there are cost of
inventory management, shutdown time of machinery, arrival and cost of outsourcing part, etc. Time required to shift the
lots from one set machineries to other, packaging, distances between operations, batch sizes, frequency of transactions,
resource utilizations etc., were studied closely for the feasibility of the re-layout scenarios. The performance measures and
results from the simulation models were then used to develop the layout for the server assembly process.
So there are n numbers of controlled and uncontrolled factors effecting the supply chain management of a
particular system. Now if anyone wants to apply any of the efficient and effective technique like six sigma, TQC, Lean,
etc., to improve the performance of the system. It is required to performed lots of experiments with different sets of
controlled and uncontrolled factors within and between the companies in the virtual models that is stimulation models.
Now question arise on what basis these experiments should be designed. Designs of an experiment means:

The set of factors selected for comparison.

The specification of the experiment units to which the factors are to be applied.

The rules according to which the factors are allocated to the experimental units.

The specification of the measurements, or other records, to be made on each experiment unit

FRAME WORK FOR SUPPLY CHAIN MANAGEMENT SYSTEM

In the case of supply chain management, consider the above mentioned factors and the companies or different
supply chains as the experimental units. Now suppose route of transport is beyond the experimenters control and an
appropriate design has to be used to isolate its effect on the difference in performance of the system of the supply chains.
The mode of transportation can be selected by the experimenter. If different supply chains are to be compared these could
be obtained from different companies or from same company keeping the other factors (time required to shift the lots from
one set of machineries to other, packaging, distance between operations, batch sizes etc.) are same for all the supply chains.
The conclusions resulting from the analysis of the observations from such experiment would be valid only for mode of
transport of the raw material or finished products under similar conditions in respect of time required to shift the lots from
one set of machineries to other, packaging, distance between operations, batch sizes etc.
Supply chain differ in many ways and these differences may overlap when comparing with supply chain.
For supply chain that differ in many criteria, it is difficult to identify which criteria cause performance difference between
the supply chains. They may not only differ with respect to standardization and postponement but also differ in the type of
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NAAS Rating: 3.13

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Relevance of Factorial Experiment in Supply

Chain Management System

customers they are serving. To analyze such situations, confounding is best tool of factorial experiments which can be
used. The effects of less importance may be confounded so that the important effects can be estimated more efficiently.
Before using this concept first let us see what is factorial experiment? What does main effects, interaction effects and
confounding means?

THE FACTORIAL EXPERIMENTS [7&8]

Suppose there are factors with

levels respectively which may affect the characteristics in which we are

interested. Then we have to estimate (i) the effects of each of the factors and, (ii) how the effect of one factors varies over
the different levels of other factors. To study these effects we investigate all possible replicate of the experiment.

Thus these are

treatment combinations (or composite treatments) to be assigned to the different experiment units.

Such an arrangement is called a

Factorial Experiment or Design.

A factorial experiment involves simultaneously more than one factor each at two or more levels, if the number of
levels of each factor in the experiment is same, the experiment is called symmetrical factorial experiment, and otherwise it
is called asymmetrical factorial or sometimes mixed factorial. The symmetrical experiments provide an opportunity to
study not only the individual effects of each factor but also their interactions. In general a factorial experiment can be
represented as

which represents each of the m at f levels. The simplest class of factorial designs is that involving

factors at two levels, that is 2 class, n being the number of factors.

Now consider an example of supply chain management system. When raw material or finished products are
transported from one place to other the two most important factors are mode of transport and route of transport. In factorial
experiments combination with these two factors (i) Mode of Transport, denoted by
,

three levels denoted by

,

and (ii) Route of Transport at

, these form the following six combinations taking one level from each factors in

such combinations form treatments in factorial experiments.

The comparison required in this type of experiments are not the pair comparison, but a special type of comparison
+

called main effect and interaction effects. The comparison between the totals
+

are called main effects of Mode of Transport. Similarly, two independent comparisons among the totals,

represents the main effect of route of transport.

Now to find out the effect of different mode of transport, when

route of transport is followed, there is effect

respectively.Comparison among these three contrasts indicate the equality or otherwise the effect of Mode

Similarly

two

more

effects

are

there

for

and

which

are

of Transport by three different route of transport. Contrast representing such comparisons, that is(
(

), (

)(

) and (

)(

and
)

) are called interaction

effects.
So this is an example of factorial experiment with two mode of transport and three route of transport of the raw
material or finished products. The method is illustrated with the help of following example.
Example
Let us consider a 24 factorial experiment where there are four factors effecting supply chains, each of these factors
are at two levels 0 and 1 (levels may be the types of the factors), the factors are Location of the factory denoted
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Keerti Jain, Vineeta Singh & Vishal Jain

by
,

,Modes of transport denoted by

Routes of transport denoted by ,

and Transport destination denoted by

. Consider the experiment is conducted in RBD (Randomized Block Designs) with r replicates. Now

represent all the four factors are at 0 level,

factors are at 0 level, similarly

represents that location of the factory is at level one and rest of the

represents location of the factory and transport destination are at level zero but

mode of transport and route of transport are at level 1, and so on. Therefore the16 combinations are as follows:
= (1),

= ,

= ,

= ,

= ,

These sixteen combinations[(1), , ,

, ,

,
,

, ,

.
,

] further obtain the main

effects and interaction effects.

= ( 1)( + 1)( + 1)( + 1),
= ( + 1)( + 1)( 1)( + 1),

= ( + 1)( 1)( + 1)( + 1),

= ( + 1)( + 1)( + 1)( 1),

= ( 1)( 1)( + 1)( + 1),

= ( 1)( + 1)( 1)( + 1),

= ( 1)( + 1)( + 1)( 1),

= ( + 1)( 1)( 1)( + 1),

= ( + 1)( 1)( + 1)( 1),

= ( + 1)( + 1)( 1)( 1),

= ( 1)( 1)( 1)( + 1),

= ( 1)( 1)( + 1)( 1),

= ( 1)( + 1)( 1)( 1),

= ( + 1)( 1)( 1)( 1),

= ( 1)( 1)( 1)( 1)

A, B, C and D as main effects and AB, AC, AD, BC, BD, CD, ABC, ABD, ACD, BCD, ABCD are called
interaction effects. In the case of2 factorial design there are four main and eleven interaction effects. These effects can
also be represented as follows:
A: 1000 B: 0100 AB: 1100
ABC: 1110

C: 0010 AC: 1010

D: 0001 ABD: 1101

CD: 0011

BC: 0110
ACD: 1011

BCD: 0111

ABCD: 1111
Since in this example we are considering factorial experiment is conducted in RBDwith r replicates, therefore let
!

=observation in the jth block for ith treatment.

Here " = 1, 2, , 16, $ = 1, 2, 3, . . , r (say)
.

=Total of ith treatment combination,

.!

=total of jth block and + =

=The grand total

= 16-= total number of observations.

Then, Total sum of square (.//)=
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01

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Relevance of Factorial Experiment in Supply

Chain Management System

Sum of square of blocks (// 45 67) =

.!

01

23

SSA represent sum of squares of main effect A, SSAB represents sum of Squares of interaction effect AB,,
SSABCD represents sum of square of interaction effect ABCD, these sum of squares for the main and interaction effects
are calculated by Yates method.
Sum of square of main effect A (SSA) =

[891
3. :

Sum of square of interaction effect AB (SSAB) =

[8;91
3. :

Sum of square of interaction effect ABC (SSABC) =

[8;<91
3. :

Similarly, sum of squares of other main and interaction effects can be calculated. Now sum of square of error
//= = .// (// 45 67 + // + // + //
//

+ //

+ //

+ //

+ //

+ // + //

+ //

+ //

+ // + //

Analysis of variance (ANOVA) table for a 2 factorial experiment in RBD with r replicates is:
Table 1: Analysis of Variance (ANOVA) Table for A >? Factorial Experiment in RBD With R Replicates
Source of Variation

Degree of Freedom

Blocks
Main effect A
Main effect B
Main effect C
Main effect D
Interaction effect AB
Interaction effect AC
Interaction effect AD
Interaction effect BC
Interaction effect BD
Interaction effect CD
Interaction effect ABC
Interaction effect ABD
Interaction effect ACD
Interaction effect BCD
Interaction effect ABCD
Error
Total

r1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
15(r 1)
16 r 1

Sum of
Squares (SS)
SS Blocks
SSA
SSB
SSC
SSD
SSAB
SSAC
SSAD
SSBC
SSBD
SSCD
SSABC
SSABD
SSACD
SSBCD
SSABCD
SSE
TSS

ABB

Mean Sum of @ =
ABBC
Squares (MSS)
MSS Blocks MSS Blocks/ MSSE
MSSA MSSA/ MSSE
MSSB MSSB/ MSSE
MSSC MSSC/ MSSE
MSSD MSSD/ MSSE
MSSAB MSSAB/ MSSE
MSSAC MSSAC/ MSSE
MSSAD MSSAD/ MSSE
MSSBC MSSBC/ MSSE
MSSBD MSSBD/ MSSE
MSSCD MSSCD/ MSSE
MSSABC MSSABC/ MSSE
MSSABD MSSABD/ MSSE
MSSACD MSSACD/ MSSE
MSSBCD MSSBCD/ MSSE
MSSABCD MSSABCD/MSSE
MSSE -

CONFOUNDING IN FACTORIAL EXPERIMENT

In the factorial experiment the number of treatment combinations increase rapidly as the number of factors or
levels increases. When the number of treatment combinations is large it may not be possible to get blocks of sufficiently
large size to accommodate all the treatment combinations. The increased size of factor reduce the precision of estimates of
important main effects and interaction effects. To overcome such situations confounding is an efficient tool.The interaction
effects which contains maximum number of treatments has been confounded with the blocks. Evidently these interaction
effects has been lost but the other interactions and main effects can now be estimated with better precision because of

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Keerti Jain, Vineeta Singh & Vishal Jain

reduced block size. This device of reducing the block size by making one or more interaction contrasts identical with block
contrasts, is known as confounding.
When there are two or more replications, if same set of interaction is confounded from all the replications than
confounding is said to be complete and if different sets of interaction effects are confounded form the different replications
than it is said to be partial confounding. Both the methods are in practice. In complete confounding all the confounded
interactions are completely lost, though in partial confounding the confounded interaction can be recovered from those
replications in which they are not confounded.
Confounding in a 2 factorial without confounding we need blocks have size 2 . If any interaction or main effect is
D

confounded the block size is reduced by half and becomes 2

we use 2r blocks of size 2

. If each treatment combination is to be replicated r times

of which r blocks get one set of treatments and the remaining r blocks get the other set. The

minimum number of blocks required is 2 when each treatment combination occurs once only. In both cases with or without
replication the arrangement is called a confounding arrangement in two blocks. This technique of Confounding could be
used to reduce the block size in the supply chain management system as well.

ANALYSIS OF VARIANCE FOR A >E CONFOUNDED FACTORIAL EXPERIMENT

If each treatment is replicated r times an independent estimate of error is obtained. Suppose we have confounded
F

2 1 interactions, the experiment being carried out -. 2F blocks of size 2

DF

each. The sum of squares for the main

effects and interactions are obtained as if there is no confounding. Of these we retain only the un-confounded main effects
and interaction effects making a total of (2 1) (2F 1) = 2 2F degree of freedoms. The sum of square of due to
the blocks is obtained -. 2F 1 degrees of freedom. The total of these two subtracted from the total sum of square
with-. 2 1 degrees of freedom gives the error sum of square with (- 1)(2 2F ) degrees of freedom.
In the above example, if we confound the interaction effect ABCD, we will get the two groups of eight treatments
each for2 factorial experiment from the solution of the equation
+

0
=H J
1

Table 2: Key Blocks of >? Factorial Experiment Confoundedwith Interaction Effect ABCD
Block 1
0000
0011
0101
0110
1001
1010
1100
1111

Block2
0001
0010
0100
0111
1000
1011
1101
1110

Block 1 is called principal or key blocks. This block is used further to create the whole design. Here we have
confounded one interaction, the experiment being carried out in 2- blocks of size 8 each. The sum of squares for the main
effects and interactions are obtained as if there is no confounding. Of these we retain only the un-confounded main effects
and interaction effects making a total of 14 degree of freedoms. The sum of square of due to the blocks is obtained with
2- 1 degrees of freedom.The total sum of square with 16- 1 degrees of freedom is obtained in the same manner.
Impact Factor (JCC): 5.7836

NAAS Rating: 3.13

31

Relevance of Factorial Experiment in Supply

Chain Management System

The error sum of square with 14(- 1) degrees of freedom is obtained by subtraction.
Analysis of variance (ANOVA) table for confounded arrangement of 2 factorial experiment in RBD withr
replicates in which ABCD interaction is confounded is as follows:
Table 3: Analysis of Variance (ANOVA) Table for A >? Factorial Experiment in
RBD with R Replicates Confounded with Interaction Effect ABCD
Source of Variation

Degree of Freedom

Blocks
Main effect A
Main effect B
Main effect C
Main effect D
Interaction effect AB
Interaction effect AC
Interaction effect AD
Interaction effect BC
Interaction effect BD
Interaction effect CD
Interaction effect ABC
Interaction effect ABD
Interaction effect ACD
Interaction effect BCD
Error
Total

2r 1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
14(r 1)
16r 1

Sum of
Squares (SS)
SS Blocks
SSA
SSB
SSC
SSD
SSAB
SSAC
SSAD
SSBC
SSBD
SSCD
SSABC
SSABD
SSACD
SSBCD
SSE
TSS

ABB

Mean Sum of @ =
ABBC
Squares (MSS)
MSS Blocks MSS Blocks/ MSSE
MSSA MSSA/ MSSE
MSSB MSSB/ MSSE
MSSC MSSC/ MSSE
MSSD MSSD/ MSSE
MSSAB MSSAB/ MSSE
MSSAC MSSAC/ MSSE
MSSAD MSSAD/ MSSE
MSSBC MSSBC/ MSSE
MSSBD MSSBD/ MSSE
MSSCD MSSCD/ MSSE
MSSABC MSSABC/ MSSE
MSSABD MSSABD/ MSSE
MSSACD MSSACD/ MSSE
MSSBCD MSSBCD/ MSSE
MSSE -

CONCLUSIONS
Factorial designs are widely used in experiments involving several factors where it is necessary to study the effect
of the factor on the response. When the factors are independent, then the factorial experiments give a broad picture of the
effect of one factor over varying levels of the other factors. They allow effects of a factor to be estimated at several levels
of the others, yielding conclusions that are valid over a range of experimental conditions. With m factors we shall need m
simple experiment but the same can be done with only one complex experiment that is factorial experiment. Thus it is
economic from time, labor and material point of view, they are more efficient than one factor at a time experiments. In
these designs individual factorial effect is estimated with precision, a whole of the experiment is devoted to it. To avoid
misleading conclusions, a factorial design is necessary when interactions are present. In fact, with independent factors
factorial experiments are the only means to provide estimates for interactions. These designs form the basis of the other
designs of considerable practical value. An additional advantage of these designs is that we can get a test for the additively
assumption from the experimental data of the factorial experiment. Confounding could be used to reduce the block size.
Factorial experiments arewidely used in research work. Also, in supply chain management on stimulation models as well
as real world situations, factorial experiment with confounding could be used for the study of different combinations of
variables and attributes at nlevels.

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Rangaraj. N, Raghuram. G, Srinivasan. M. M, (2009); Supply Chain Management for Competitive Advantage;
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Keerti Jain, Vineeta Singh & Vishal Jain

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