Promising orders in supply chain networks Online publication date: Mon, 21-Jan-2008
by Uday Venkatadri, Shentao Wang, Ashish Saraswat
International Journal of Industrial and Systems Engineering (IJISE), Vol. 3, No. 2, 2008
Abstract: We consider how orders may be promised in a supply chain network. Order promising is increasingly getting attention in both theory and practice due to the proliferation of automated ordering systems. In our model, customers request quotations for a given quantity of products on a due date. The question for a firm is what dates to promise in reply to requests-based on production plans and distribution plans and available capacity. The inputs represent production and distribution data, initial inventories, committed orders and customer due date requests. The outputs of our model are the production quantities in each period and the sourcing path for each product. We show the application of the model to quoting due dates, estimating marginal costs for requests and estimating the maximum availability of products in time periods. The model can be used by companies to promise orders in combination with existing Enterprise Resource Planning (ERP) software.
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