Order Acceptance Decision And Benefits Analyzing Of Build-to-order Supply Chain

The global nature of the markets and competition has forced many companies to undergo numerous changes in terms of strategies, tactics, and operations. Mass customization has become a major subjectives of many companies. Towards this end, firms have developed a build-to-order (BTO) supply chain to be flexible and responsive. Based on this situation, several factors which affect the order acceptance decision and supply chain benefits are considered. Order acceptance decision models are built from two aspects, supply chain benefits from information sharing, system coordination and advance order commitment are studied. The main contribution of this thesis can be summarized as follows:Order acceptance decision models are presented. Manufacturer with finite production capacity has ability to accept or reject orders. Each customer has a commitment time and preferred and latest ascceptable due-dates. Orders can be produced and delivered after its preferred due date with penalty cost. Mixed integer programming models are proposed, whose objective is to maximize the profits by considering the production cost, inventory holding cost and tardiness cost simultaneously, coordinating order selection, due-date setting, and scheduling decision. Insights regarding the benefiets of leadtime flexibility in different environment are provided. Two order processing method, i.e., split-lot processing and whole-lot processing, are considered. Numerical analyses show that whatever the environment is, profits gained from split-lot order processing is always higher than from whole-lot order processing. The magnitude of the benefit of leadtime flexibility depends on environmental factors in various ways.Order acceptance decision with limited capacity and finite output buffers in BTO manufacturing environment is presented. An integer programming model is proposed to cooperate the order acceptance and production scheduling decisions, the objective is to maximize the manufacturer's profit presented by the difference of total revenue from all accepted orders and total penalty cost caused by order tardiness. Through numerical example, the impacts of demand distribution and output buffers on system profit are examined. The results suggest that the system profit gained by using the proposed model is much higher than using the old FCFS method. The results are helpful for managers to make order acceptance decisions.The impact of order information sharing and physical flow coordination in a BTO supply chain is analysed. A two-level build-to-order supply chain composed of one manufacturer and one supplier is studied. Mathematical models are built to analyze the manufacturer's ordering policies, vendor's manufacturing and order fulfillment processes under different integration strategies. The objective is to measure the value of information sharing and coordination in this supply chain across these strategies. Experimental results indicate a 22.76% cost reduction moving from a traditional supply chain to a fully integrated supply chain, and the times of manufacturer's purchasing, supplier's setup and delivering are reduced as well. While information sharing can reduce system cost, the main benefit comes from coordination. The benefits are not allocated equally among the members, and vary by strategy.The impact of advanced order commitments to BTO supply chain and the possibility of advanced order commitments attracted by price discount are studied. A model is developed to quantify the benefits to the supplier from obtaining advanced commitments from downstream customers. This model can be used to suggest the maximum price discount that can be offered to customers to encourage them to commit their orders in advance. The trade-off between advanced ordering time and price discount can lead to cost reductions for both members of the supply chain. A useful tool is provided for estimating the cost-savings associated with various levels of advance order commitments. These analysises create an opportunity for a firm to offer slightly less flexibility to customers in the form of early order commitment, in exchange for lower prices.