The Use of Optimization Models within the Order
Promising and Fulfillment Process
Michael O. Ball and Zhenying Zhao
Robert H. Smith School of Business
and
Institute for Systems Research
University of Maryland
College Park, MD 20742
Increasingly, customer
service, rapid response to customer requirements, and flexibility to handle
uncertainties in both demand and supply are becoming strategic differentiators
in the marketplace. Motivated by these challenges, the Available-to-Promise
(ATP) function has migrated from a set of availability records in a Master
Production Schedule (MPS) toward an advanced real-time decision support
system to enhance decision responsiveness and quality. In this paper,
we describe a set of enhancements carried out to adapt previously published
mixed-integer-programming (MIP) models to the specific requirements posed
by an electronic product supply chain within Toshiba Corporation. This
model can provide individual order delivery quantity and due dates, together
with production schedules, for a batch of customer orders that arrive within
a predefined batching interval. The model considers three categories of
resource availability including manufacturing orders, production capability
and production capacity, where the nature of the resource constraint varies
with the required order due date. In addition, the model also takes into
account a variety of realistic order promising issues such as order splitting,
model decomposition and resource expediting and de-expediting. We
conclude this paper with comparison of our model execution results vs.
actual historical performance of systems currently in place.