Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
6894899 | European Journal of Operational Research | 2018 | 12 Pages |
Abstract
In this paper, we consider the order acceptance and order release decisions of a manufacturer facing order-specific demand. In contrast to previous literature, both demand and production are stochastic. We develop a novel bid-price-based revenue management approach to solve this decision problem. The production system is modeled using clearing functions to capture the non-linear inter-dependency of workload and lead times in stochastic production systems. In extant literature, a common approach to cope with variability in a production system is to introduce fixed, workload-independent lead times. We show in a numerical study that our newly developed approach based on clearing functions clearly outperforms this fixed lead time approach.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Hendrik Guhlich, Moritz Fleischmann, Lars Mönch, Raik Stolletz,