Abstract
Order promising in make-to-order manufacturing often has a strong focus on resource oriented factors. Economic aspects are, if at all, only implicitly taken into account. In this paper we develop a revenue management approach to improve order promising for short-term sales in the iron and steel industry as an example of make-to-order manufacturing. We formulate a multi-dimensional knapsack problem to cope with the uniqueness of orders and the corresponding capacity demand. To provide decision support in accepting/rejecting orders, we implement two bid-price calculation schemes. Competitive computational analysis based on real world production data shows the potential benefit of our approach.
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Spengler, T., Rehkopf, S. & Volling, T. Revenue management in make-to-order manufacturing—an application to the iron and steel industry. OR Spectrum 29, 157–171 (2007). https://doi.org/10.1007/s00291-005-0024-1
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DOI: https://doi.org/10.1007/s00291-005-0024-1