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Pricing Policies of Excess Capacity in Make to Order Production Systems

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Abstract

The research concerns a make to order manufacturing environment and two classes of customers who submit orders. The core customers have a contract with the firm at fixed services level (price and due date). The short-term customers submit the orders based on the price set by the firm. In this paper, it is proposed a pricing policy based on fuzzy logic to set the price for the short-term customers. The fuzzy approach captures the state of the manufacturing systems in terms of congestion in order to set the price. The policy proposed is compared to a fixed price, and to a state-dependent policy based on three levels of price. A discrete event simulation environment is used to test the proposed approach in a static, dynamic environment and considering the reliability of the manufacturing system. The simulation results show how the proposed approach outperforms the other policies in all conditions tested.

Keywords

  • excess capacity
  • make to order
  • fuzzy logic
  • discrete event simulation

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Correspondence to Paolo Renna .

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Renna, P., Perrone, G. (2014). Pricing Policies of Excess Capacity in Make to Order Production Systems. In: Zaeh, M. (eds) Enabling Manufacturing Competitiveness and Economic Sustainability. Springer, Cham. https://doi.org/10.1007/978-3-319-02054-9_68

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  • DOI: https://doi.org/10.1007/978-3-319-02054-9_68

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-02053-2

  • Online ISBN: 978-3-319-02054-9

  • eBook Packages: EngineeringEngineering (R0)