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Manufacturing Systems with Delivery Time Guarantee

  • Wai Ki Ching
Part of the Springer Monographs in Mathematics book series (SMM)

Abstract

In this chapter, we study production planning in a manufacturing system under Delivery Time Guarantees (DTG). DTG policy is a marketing strategy used by many commercial companies to attract and retain customers. Here are some examples of DTG policies used by different companies. United Parcel Services (UPS) guarantees next-day delivery by 8:30 am. Pizza Hut in Hong Kong offers a free pizza if the ordered pizza cannot be served within 20 minutes. Lucky, a major supermarket chain in California, use a “three’s a crowd” campaign, which guarantees a new checkout counter will be open if there are more than three people waiting in its checkout queue. Wells Fargo Bank offers a “five minute maximum wait policy” which offers five dollars to the customer if the customer waits for more than five minutes in line. We note that a DTG works under the condition that each customer is given a guaranteed quality of service. But in the mentioned examples if a company fails to fulfill its promise, it will lead to the loss of money, customers, and even the reputation of the company; see [16, 36, 44, 63, 64, 88].

Keywords

Manufacturing System Delivery Time Inventory Level Penalty Cost Unit Price 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag London 2001

Authors and Affiliations

  • Wai Ki Ching
    • 1
  1. 1.Faculty of Mathematical StudiesUniversity of SouthamptonHighfield SouthamptonUK

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