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Title: |
Pricing and Due Date Quotation in a Make-To-Order Firm Based on Revenue Management |
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Source: |
International Conference on Engineering and Business Management 2012(Part 1 Enterprise Operation and Management（1）)
(pp 127-130)
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Author(s): |
Lifan Fan, School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, China, 610054
Xu Chen, School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, China, 610054 |
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Abstract: |
Make-to-order (MTO) manufacturing firms can influence external demand by dynamic pricing and due date quotation, besides directly rejecting orders. This paper introduces revenue management to study the pricing and due date quotation in a MTO system. We consider two cases. The first case models the problem when the coming order is a regular one. We schedule it according to the first-come-first-served (FCFS) rule, and use a simulated annealing algorithm to determine the optimal price and the optimal due date. The second case takes into account that the arriving order is an urgent one, where the due date is determined by customers.Instead of following the FCFS rule, MTO firm can schedule the urgent order with an early production, and also employ the simulated annealing algorithm to find the optimal price and the optimal production schedule corresponding to the due date required by customers. Finally, numerical examples are presented both for regular and urgent order.
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