Integrating multi-period quantity flexibility contracts with a capacitated production and inventory planning

Download
2008
Kayhan, Mehmet
This research introduces a general approach for integrating a probabilistic model of the changes in the committed orders with an analytical model of production and inventory planning under multi-period Quantity Flexibility contracts. We study a decentralized structure where a capacitated manufacturer, capable of subcontracting, serves multiple contract buyers who actually perform forecasts on a rolling horizon basis. We model the evolution of buyers' commitments as a multiplicative forecast evolution process accommodating contract revision limits. A finite Markovian approximation to this sophisticated evolution model is introduced for facilitating the associated complex probability modeling. We implement computational dynamic programming and introduce an effective approach for reducing state-space dimensionality building upon our forecast evolution structure. Computational investigation demonstrates how the manufacturer benefits from the existence of order commitments and subcontracting option by analyzing the interplay of decisions.

Suggestions

An approximate model for performance measurement in base-stock controlled assembly systems
Rodoplu, Umut; Avşar, Zeynep Müge; Department of Industrial Engineering (2004)
The aim of this thesis is to develop a tractable method for approximating the steady-state behavior of continuous-review base-stock controlled assembly systems with Poisson demand arrivals and manufacturing and assembly facilities modeled as Jackson networks. One class of systems studied is to produce a single type of finished product assembling a number of components and another class is to produce two types of finished products allowing component commonality. The performance measures evaluated are the exp...
A quality-based approach to estimating quantitative elasticities for differentiated products: an application to retail milk demand
Gülseven, Osman (2015-09-01)
This article introduces the Hedonic Metric (HM) approach as an original method to model the demand for differentiated products using qualitative attributes. Our approach is based on a two-stage estimation procedure that utilizes qualitative characteristics of products. First, we create an n-dimensional hedonic space based on the qualitative information available to consumers. Next, we allocate the differentiated products into this space and estimate the quantitative demand elasticities for these products us...
Managing production and lead time quotation with multiple demand classes
Sayın, Ece; Savaşaneril Tüfekci, Seçil; Department of Industrial Engineering (2010)
In this study, we investigate several facets of a due-date quotation problem and develop a model considering jointly due-date quotation, order acceptance and base-stock decisions in a hybrid make-to-stock (MTS) / make-to-order (MTO) and multi-class system with lead time sensitive Poisson demand and exponentially distributed service times. We seek to maximize profit considering lateness penalties and holding costs in the model. We consider three alternative due-date quotation policies each having different p...
Integrated demand and procurement portfolio management with spot market volatility and option contracts
Merzifonluoglu, Yasemin (2017-04-01)
The newsvendor problem aims to optimally choose a level of order quantity to respond to a known demand distribution with the objective of maximizing expected return. In practice, the decision maker is often challenged with more complex settings involving multiple decisions and uncertainties. For instance, firms may benefit from choosing the set of customer orders to satisfy. It may also be worthwhile for many firms to select a supply portfolio instead of relying on a single procurement mode. This paper prov...
Using gap analysis to improve system acceptance
Russell, Bruce D.; Yilmaz, Mustafa R. (Informa UK Limited, 2006-09-01)
The authors describe a user/customer needs gap model that can be used to develop a balanced approach to managing the gaps between business customer and end-user needs for new systems and the solutions that are deployed.
Citation Formats
M. Kayhan, “Integrating multi-period quantity flexibility contracts with a capacitated production and inventory planning,” Ph.D. - Doctoral Program, Middle East Technical University, 2008.