Order acceptance strategies in a production-to-order environment with setup times and due-dates

SUMMARY A production situation is considered in which different items are produced on one machine. Setup times are incurred between the production of orders of different items. Production is driven by customer orders; each order concerns a batch of one product type and is furthermore completely characterized by its batchsize and (customer determined) due-date. Acceptance of orders may be refused if these orders are likely to cause late deliveries. The problem is to determine good acceptance strategies which naturally raises the question on what information such acceptance decisions have to be based. Three basic approaches are explored in this paper. In the monolithic approach, the acceptance decision is based on detailed information on a current production schedule for all formerly accepted orders. In the hierarchic approach, the acceptance strategy is based on global capacity load profiles only, while detailed scheduling of accepted orders takes place at a lower level (possibly later in time). In the myo...