Modeling ordered decision making in MTO/MTS production industries

Abstract

This paper models the process of ordered product design decision making. The problem is formulated by introducing the notion of Quality Loss to quantify the loss of design freedom incurred by the decision makers in the later stages of a cross-functional decision process. In this context, the optimal order is the decision order with the lowest quality loss, whose characterization is one of the contributions of this paper. In this paper, we present a novel decision support system for order in a Make-to-Stock or Make-to-Order production environment. The proposed decision support system is comprised of six steps. The customers are prioritized based on a new method. In this paper, the idea of the algorithm “Knapsack” is used to prioritize customers. Finally, numerical experiments are conducted to show the tractability of the applied mathematical programming model.

Keywords

• Make-to-order
• Decision-making structure
• Make-to-store
• Customer prioritization
• Price and due date negotiation