A Revenue Management Approach for Make-to-Stock Production
Speaker
Abstract
| Successful revenue management applications abound in the service industries, including the well-known examples of the airline, hotel, and car rental businesses. The situation in the manufacturing industry is quite different. This is due to the specific characteristics in manufacturing, as for example storage of excess capacity. |
| In this talk, a model – able to cope with the specific needs of make-to-stock manufacturing – will be shown. Additionally, structural and numerical results will be discussed. |
| In the model, the following situation is considered: In a make-to-stock production system with exogenously given deterministic replenishments and several customer classes, the goal is to maximize profit over the planning horizon. This is done by deciding whether to accept or reject a given order in anticipation of more profitable future orders. What distinguishes this setup from classical revenue management approaches, as for example in airline ticket booking, is the explicit consideration of past and future replenishments and the integration of inventory holding and backlogging costs. If stock is on-hand, orders can be fulfilled immediately, backlogged or rejected. In shortage situations, orders can be either rejected or backlogged to be fulfilled from future arriving supply. |
| Contact information: |
| Cheryl Eiting |
