| In today's business environment, companies need to invest in advanced manufacturing systems (AMS) to remain viable in highly competitive world market place. Investments and implementation of this type of system change entire manufacturing processes and, eventually, the cost structure of these processes. Advanced manufacturing systems (AMS), such as flexible manufacturing systems (FMS) and computer integrated manufacturing (CIM), significantly reduces direct costs and greatly increases overhead costs, as a percentage of value added, because of the increased support expenses associated with maintaining and running these systems.; The objective of this dissertation is to provide managers with an integrated model of the firm's physical resources with the firm's cost structure, within a supply chain environment, for effective order management decisions. The model performs simultaneous production planning and profitability analysis in a pull-based system, allocating capacity via a continuously updated marginal cost of production. The results provide a framework for applications of synchronized sales and production planning models, as well as help managers select the appropriate model for their business environment. To this end, an integrated production planning and order management model is formulated as a Mixed Integer Program (MIP) incorporating two different manufacturing cost paradigms: (1) Activity-based costing (ABC) methodology supporting a hierarchical unit-level, batch-level, and order-level costs, and (2) Theory of Constraints-based approach (TOC) in which manufacturing costs are treated as an overall “operating expense”.; The MIP is solved to maximize profitability, by accepting the most profitable set of customer orders among the existing pool of customer demand—subject to the availability of raw materials, components and finished goods, as well as production capacities. The model considers supplier information, capacity availability, inventory and manufacturing costs, and the demand information representing the firm's overall value chain. The dissimilar manufacturing cost structures are expected to have an impact on the decisions that are considered optimal by the MIP.; These two different approaches are used in making order acceptance and production planning decisions for a given planning horizon under varying levels of capacity utilization and order size variability.; The integrated cost model is in effect a decision support system for order management and production planning that can interface with on-line ERP systems directly linking accounting data, production resources and customer demand management systems. (Abstract shortened by UMI.)... |
