Bid price-based revenue management approaches in manufacturing industries

Guhlich, Hendrik

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URL:	https://madoc.bib.uni-mannheim.de/41264
URN:	urn:nbn:de:bsz:180-madoc-412642
Document Type:	Doctoral dissertation
Year of publication:	2016
Place of publication:	Mannheim
University:	Universität Mannheim
Evaluator:	Stolletz, Raik
Date of oral examination:	29 April 2016
Publication language:	English
Institution:	Business School > ABWL u. Logistik (Fleischmann 2009-) Business School > ABWL u. Produktion (Stolletz 2010-)
Subject:	330 Economics
Subject headings (SWD):	Revenue Management
Keywords (English):	Order acceptance , order release , bid price , production
Abstract:	Whenever demand exceeds capacity, the available resources must be allocated to the incoming demand. A simple first-come-first-served allocation can lead to rather poor results if the demand is heterogeneous, i.e., if orders differ in their strategic importance for a company, their willingness to pay, their lead time requirements, etc. In addition, the decisions must be made under uncertainty because demand is often stochastic. If too many low value orders are rejected, capacity might remain unused. On the other hand, if too many low value orders are accepted, there might be not enough capacity to accept all high value orders. Apart from the order acceptance decision, it might also be preferable to delay the order release of already accepted orders, even if capacity is available, to reserve capacity for future high value orders. This thesis considers the demand management decisions in different order-driven production environments. Orders are accepted or rejected immediately upon arrival, and at the beginning of each planning period, the set of orders to be released is selected. As exact solution methods are computationally intractable, bid price-based revenue management approaches are applied to maximize the contribution margin gained by accepted orders minus holding and backlog costs. The first essay considers a deterministic single-stage assembly process, where both capacity and intermediate materials are scarce resources. In this essay, for each accepted order a due date is quoted and the accepted orders are scheduled such that the quoted due dates are kept. The second essay considers a deterministic multi-stage make-to-order production system. In this study, intermediate materials are assumed to be unlimited available. The third essay considers a multi-stage make-to-order production system with stochastic influences. To take into account that in these production systems, lead times depend non-linearly on the load of the system, clearing functions are used to model the production system.