Order Acceptance Decision in Make-to-Order System: Satisfaction Level Based Approach

Abstract

In make-to-order (MTO) system, deciding which order to accept and which to reject from an incoming orders is one of the most challenging tasks for the decision maker (DM) of manufacturer. When the new order arrives, order acceptance (OA) decision is affected by two kinds of satisfaction level. One is the satisfaction level expected by the DM. This level indicates the acceptance threshold of DM. Next is the satisfaction level that will be generated by the order. In this paper, we propose a method that reflects OA decision as interplay between the DM's acceptance threshold and satisfaction level generated by the order. We investigate this less researched topic in a job shop environment with uncertain scenario. In the proposed method, the DM's acceptance threshold is shown to be the function of workload in the production system and their aggressiveness. While, we consider four criteria to access the satisfaction level generated by the order. They are reputation in terms of delivery reliability, profit both at present and in the future and the utilization of available capacity. We present a numerical analysis by considering various parameters under two different cases of due dates to demonstrate the working mechanism and effectiveness of proposed method.