Real-time order management with supplier capacity reservation
by Elias T. Kirche, Rajesh Srivastava
International Journal of Manufacturing Technology and Management (IJMTM), Vol. 19, No. 1/2, 2010

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.

Online publication date: Mon, 30-Nov-2009

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