A decision support system for order acceptance/rejection in hybrid MTS/MTO production systems

Abstract In this paper, we present a novel decision support system for order acceptance/rejection in a hybrid Make-to-Stock/Make-to-Order production environment. The proposed decision support system is comprised of five steps. At the first step, the customers are prioritized based on a fuzzy TOPSIS method. Rough-cut capacity and rough-cut inventory are calculated in the second step and in case of unavailability in capacity and materials, some undesirable orders are rejected. Also, proper decisions are made about non-rejected orders. At the next step, prices and delivery dates of the non-rejected orders are determined by running a mixed-integer mathematical programming model. At the fourth step, a set of guidelines are proposed to help the organization negotiate over price and due date with the customers. In the next step, if the customer accepts the offered price and delivery date, the order is accepted and later considered in the production schedule of the shop floor, otherwise the order is rejected. Finally, numerical experiments are conducted to show the tractability of the applied mathematical programming model.

[1]  Donatella Corti,et al.  Due date (DD) quotation and capacity planning inmake-to-order companies: results from an empirical analysis , 2008 .

[2]  Donatella Corti,et al.  A capacity-driven approach to establish reliable due dates in a MTO environment , 2006 .

[3]  Joakim Wikner,et al.  Integrating production and engineering perspectives on the customer order decoupling point , 2005 .

[4]  S. Lawrence.  Negotiating due-dates between customers and producers , 1994 .

[5]  P. Rogers,et al.  Judicious order acceptance and order release in make-to-order manufacturing systems , 2007 .

[6]  Brian G. Kingsman,et al.  Customer Enquiry Management: Part of a Hierarchical System to Control Lead Times in Make-to-Order Companies , 1993 .

[7]  D. R. Moodie.  Due Date Demand Management : Negotiating the Trade-off Between Price and Delivery , 1999 .

[8]  Jing-Sheng Song,et al.  Price, delivery time guarantees and capacity selection , 1998, Eur. J. Oper. Res..

[9]  Andi Cakravastia,et al.  Model for negotiating the price and due date for a single order with multiple suppliers in a make-to-order environment , 2002 .

[10]  Susan A. Slotnick,et al.  Order acceptance with weighted tardiness , 2007, Comput. Oper. Res..

[11]  R. Oliver.  Whence Consumer Loyalty? , 1999 .

[12]  S. Sridharan,et al.  Managing capacity in tightly constrained systems , 1998 .

[13]  Brian G. Kingsman,et al.  A structural methodology for managing manufacturing lead times in make-to-order companies , 1989 .

[14]  M. Elhafsi.  An Operational Decision Model for Lead-Time and Price Quotation in Congested Manufacturing Systems , 2000 .

[15]  Jeffrey D. Camm,et al.  Coping with the build-to-forecast environment , 1990 .

[16]  B. Kingsman,et al.  Production planning systems and their applicability to make-to-order companies , 1989 .

[17]  Nico Dellaert,et al.  Production strategies for a stochastic lot-sizing problem with constant capacity , 1996 .

[18]  Bunthit Watanapa,et al.  Simultaneous price and due date settings for multiple customer classes , 2005, Eur. J. Oper. Res..

[19]  Jwm Will Bertrand,et al.  Production control and information systems for component-manufacturing shops , 1981 .

[20]  Whm Henk Zijm,et al.  Order acceptance strategies in a production-to-order environment with setup times and due-dates , 1992 .

[21]  Christopher S. Tang,et al.  Modelling the Costs and Benefits of Delayed Product Differentiation , 1997 .

[22]  M. Holweg,et al.  Successful Build-to-Order Strategies Start With the Customer , 2001 .

[23]  M. Uncles,et al.  Customer loyalty and customer loyalty programs , 2003 .

[24]  Marisela Mainegra Hing,et al.  Order acceptance under uncertainty: a reinforcement learning approach , 2006 .

[25]  D. P. Donk,et al.  Combined make-to-order and make-to-stock in a food production system , 2004 .

[26]  Nagraj Balakrishnan,et al.  Rationing Capacity Between Two Product Classes , 1996 .

[27]  Mohammad Izadikhah,et al.  Extension of the TOPSIS method for decision-making problems with fuzzy data , 2006, Appl. Math. Comput..

[28]  Wolfgang Bechte.  Theory and practice of load-oriented manufacturing control , 1988 .

[29]  Douglas R. Moodie,et al.  Pricing and lead time decisions for make-to-order firms with contingent orders , 1999, Eur. J. Oper. Res..

[30]  Jalal Ashayeri,et al.  Order selection optimization in hybrid make-to-order and make-to-stock markets , 2001, J. Oper. Res. Soc..

[31]  Reza Tavakkoli-Moghaddam,et al.  A new decision-making structure for the order entry stage in make-to-order environments , 2008 .