The effect of early order commitment in order-driven supply chain

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In an order-driven supply chain (e.g. perishable product supply chain) consisting of a single manufacturer and multiple customers (i.e. downstream customer enterprises), the manufacturer determines its production capacity (e.g. number of workers) at a certain time based on the orders that have been already received and the predicted orders to come, and fulfills orders beyond the capacity by increasing it with higher production cost rate. In this paper, we introduce an early order commitment (EOC) strategy into the order-driven supply chain, wherein each customer enterprise places orders either before (i.e. early orders) or after (i.e. regular orders) the determination of manufacturer's production capacity independently without knowing others' order timings. Towards this end, we develop an analytical model for a grafted seedling supply chain as a case study to quantify the manufacturer's production capacity and customer enterprise's optimal order quantity, respectively. To estimate the production cost rate, a simulator was developed mimicking nursery and grafting operations together with related material handling activities. The experiment results indicate that EOC is beneficial to the entire supply chain but increases customer enterprise's demand forecasting error, and each customer's purchase cost rate is affected by both its own and others' ordering times.

Original languageEnglish (US)
Title of host publicationIIE Annual Conference and Expo 2014
PublisherInstitute of Industrial Engineers
Pages698-707
Number of pages10
ISBN (Print)9780983762430
StatePublished - 2014
EventIIE Annual Conference and Expo 2014 - Montreal, Canada
Duration: May 31 2014Jun 3 2014

Other

OtherIIE Annual Conference and Expo 2014
CountryCanada
CityMontreal
Period5/31/146/3/14

Fingerprint

Supply chains
Industry
Costs
Materials handling
Analytical models
Simulators
Experiments

Keywords

  • ANOVA
  • Discrete event simulation
  • Grafting propagation
  • Supply chain coordination

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering
  • Control and Systems Engineering

Cite this

Meng, C., Son, Y-J., & Kubota, C. (2014). The effect of early order commitment in order-driven supply chain. In IIE Annual Conference and Expo 2014 (pp. 698-707). Institute of Industrial Engineers.

The effect of early order commitment in order-driven supply chain. / Meng, Chao; Son, Young-Jun; Kubota, Chieri.

IIE Annual Conference and Expo 2014. Institute of Industrial Engineers, 2014. p. 698-707.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Meng, C, Son, Y-J & Kubota, C 2014, The effect of early order commitment in order-driven supply chain. in IIE Annual Conference and Expo 2014. Institute of Industrial Engineers, pp. 698-707, IIE Annual Conference and Expo 2014, Montreal, Canada, 5/31/14.
Meng C, Son Y-J, Kubota C. The effect of early order commitment in order-driven supply chain. In IIE Annual Conference and Expo 2014. Institute of Industrial Engineers. 2014. p. 698-707
Meng, Chao ; Son, Young-Jun ; Kubota, Chieri. / The effect of early order commitment in order-driven supply chain. IIE Annual Conference and Expo 2014. Institute of Industrial Engineers, 2014. pp. 698-707
@inproceedings{7889f58f4f724397872871715b83682d,
title = "The effect of early order commitment in order-driven supply chain",
abstract = "In an order-driven supply chain (e.g. perishable product supply chain) consisting of a single manufacturer and multiple customers (i.e. downstream customer enterprises), the manufacturer determines its production capacity (e.g. number of workers) at a certain time based on the orders that have been already received and the predicted orders to come, and fulfills orders beyond the capacity by increasing it with higher production cost rate. In this paper, we introduce an early order commitment (EOC) strategy into the order-driven supply chain, wherein each customer enterprise places orders either before (i.e. early orders) or after (i.e. regular orders) the determination of manufacturer's production capacity independently without knowing others' order timings. Towards this end, we develop an analytical model for a grafted seedling supply chain as a case study to quantify the manufacturer's production capacity and customer enterprise's optimal order quantity, respectively. To estimate the production cost rate, a simulator was developed mimicking nursery and grafting operations together with related material handling activities. The experiment results indicate that EOC is beneficial to the entire supply chain but increases customer enterprise's demand forecasting error, and each customer's purchase cost rate is affected by both its own and others' ordering times.",
keywords = "ANOVA, Discrete event simulation, Grafting propagation, Supply chain coordination",
author = "Chao Meng and Young-Jun Son and Chieri Kubota",
year = "2014",
language = "English (US)",
isbn = "9780983762430",
pages = "698--707",
booktitle = "IIE Annual Conference and Expo 2014",
publisher = "Institute of Industrial Engineers",

}

TY - GEN

T1 - The effect of early order commitment in order-driven supply chain

AU - Meng, Chao

AU - Son, Young-Jun

AU - Kubota, Chieri

PY - 2014

Y1 - 2014

N2 - In an order-driven supply chain (e.g. perishable product supply chain) consisting of a single manufacturer and multiple customers (i.e. downstream customer enterprises), the manufacturer determines its production capacity (e.g. number of workers) at a certain time based on the orders that have been already received and the predicted orders to come, and fulfills orders beyond the capacity by increasing it with higher production cost rate. In this paper, we introduce an early order commitment (EOC) strategy into the order-driven supply chain, wherein each customer enterprise places orders either before (i.e. early orders) or after (i.e. regular orders) the determination of manufacturer's production capacity independently without knowing others' order timings. Towards this end, we develop an analytical model for a grafted seedling supply chain as a case study to quantify the manufacturer's production capacity and customer enterprise's optimal order quantity, respectively. To estimate the production cost rate, a simulator was developed mimicking nursery and grafting operations together with related material handling activities. The experiment results indicate that EOC is beneficial to the entire supply chain but increases customer enterprise's demand forecasting error, and each customer's purchase cost rate is affected by both its own and others' ordering times.

AB - In an order-driven supply chain (e.g. perishable product supply chain) consisting of a single manufacturer and multiple customers (i.e. downstream customer enterprises), the manufacturer determines its production capacity (e.g. number of workers) at a certain time based on the orders that have been already received and the predicted orders to come, and fulfills orders beyond the capacity by increasing it with higher production cost rate. In this paper, we introduce an early order commitment (EOC) strategy into the order-driven supply chain, wherein each customer enterprise places orders either before (i.e. early orders) or after (i.e. regular orders) the determination of manufacturer's production capacity independently without knowing others' order timings. Towards this end, we develop an analytical model for a grafted seedling supply chain as a case study to quantify the manufacturer's production capacity and customer enterprise's optimal order quantity, respectively. To estimate the production cost rate, a simulator was developed mimicking nursery and grafting operations together with related material handling activities. The experiment results indicate that EOC is beneficial to the entire supply chain but increases customer enterprise's demand forecasting error, and each customer's purchase cost rate is affected by both its own and others' ordering times.

KW - ANOVA

KW - Discrete event simulation

KW - Grafting propagation

KW - Supply chain coordination

UR - http://www.scopus.com/inward/record.url?scp=84910027367&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84910027367&partnerID=8YFLogxK

M3 - Conference contribution

AN - SCOPUS:84910027367

SN - 9780983762430

SP - 698

EP - 707

BT - IIE Annual Conference and Expo 2014

PB - Institute of Industrial Engineers

ER -