Production and Transportation Integration for a Make-to-Order Manufacturing Company with a Commit-to-Delivery Business Mode

When a make-to-order manufacturing company adopts a commit-to-delivery business mode, it commits a delivery due date for an order and is responsible for the shipping cost. Without loss of generality, we consider that transportation is done by a third-party logistics company, such as FedEx or UPS, wh...

Celý popis

Uložené v:
Podrobná bibliografia
Vydané v:Manufacturing & service operations management Ročník 9; číslo 2; s. 206 - 224
Hlavní autori: Stecke, Kathryn E, Zhao, Xuying
Médium: Journal Article
Jazyk:English
Vydavateľské údaje: Linthicum INFORMS 01.04.2007
Institute for Operations Research and the Management Sciences
Edícia:Manufacturing & Service Operations Management
Predmet:
Analysis
Business models
commit to delivery
Integer programming
Integration
Job shops
make to order
Manufacturers
Manufacturing
Manufacturing industry
Order processing
Production management
Production scheduling
scheduling
Scheduling (Management)
Studies
Transportation
United States
ISSN:1523-4614, 1526-5498
On-line prístup:Získať plný text
Tagy: Pridať tag
Žiadne tagy, Buďte prvý, kto otaguje tento záznam!
Popis
Shrnutí:When a make-to-order manufacturing company adopts a commit-to-delivery business mode, it commits a delivery due date for an order and is responsible for the shipping cost. Without loss of generality, we consider that transportation is done by a third-party logistics company, such as FedEx or UPS, which provides multiple shipping modes such as overnight, one-day, two-day delivery, and more. When the transportation time has to be short, clearly, shipping cost is more expensive than it could have been. How should a company schedule production for accepted orders so that the company can leave enough transportation time for orders to take slow shipping modes to reduce the shipping cost? We study this problem of integrating the production and transportation functions for a manufacturing company producing a variety of customized products in a make-to-order environment with a commit-to-delivery mode of business. Various realistic scenarios are investigated in increasing order of complexity. When partial delivery is allowed by customers, we provide both a mixed-integer programming (MIP) model and a minimum cost flow model. We show that nonpreemptive earliest due date (NEDD) production schedules are optimal when partial delivery is allowed and shipping cost is a decreasing convex function with transportation time. When partial delivery is not allowed, we develop an MIP model and prove that the problem is NP-hard. An efficient heuristic algorithm with polynomial computation time is provided for the NP-hard problem. It gives near-optimal production schedules, as shown via thousands of numerical experiments. We also provide models and analysis for other scenarios where shipping cost accounts for customer locations and quantity discounts.
Bibliografia:SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 14
ISSN:1523-4614
1526-5498
DOI:10.1287/msom.1060.0138