Title: Real-time order management with supplier capacity reservation

Authors: Elias T. Kirche, Rajesh Srivastava

Addresses: Department of CIS and Decision Sciences, Lutgert College of Business, Florida Gulf Coast University, Ft. Myers, FL 33965, USA. ' Department of CIS and Decision Sciences, Lutgert College of Business, Florida Gulf Coast University, Ft. Myers, FL 33965, USA

Abstract: Collaboration between firms and their suppliers is growing in response to the need for integrating supply chains to minimise risk and increase profitability for both sides. In this study this issue is studied in the context of a build-to-order environment. Profitability of the firm impacted by order management decisions is examined in real time using a Profitable-To-Promise (PTP) model. It is shown that there is an optimal level of capacity to reserve with a preferred supplier in order to maximise profitability. The level of capacity to reserve in order to maximise customer service levels is also examined.

Keywords: demand management; supplier capacity reservation; supply chain integration; supply chain management; SCM; supply chain collaboration; build-to-order; service levels; real time.

DOI: 10.1504/IJMTM.2010.029454

International Journal of Manufacturing Technology and Management, 2010 Vol.19 No.1/2, pp.124 - 139

Published online: 30 Nov 2009 *

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