A clearing function based bid-price approach to integrated order acceptance and release decisions

Guhlich, Hendrik ; Fleischmann, Moritz ; Mönch, Lars ; Stolletz, Raik

DOI: https://doi.org/10.1016/j.ejor.2018.01.006
URL: https://www.sciencedirect.com/science/article/pii/...
Additional URL: https://www.researchgate.net/publication/322449359...
Document Type: Article
Year of publication: 2018
The title of a journal, publication series: European Journal of Operational Research : EJOR
Volume: 268
Issue number: 1
Page range: 243-254
Place of publication: Amsterdam [u.a.]
Publishing house: Elsevier
ISSN: 0377-2217
Publication language: English
Institution: Business School > ABWL u. Logistik (Fleischmann 2009-)
Subject: 330 Economics
Abstract: In this paper, we consider the order acceptance and order release decisions of a manufacturer facing order-specific demand. In contrast to previous literature, both demand and production are stochastic. We develop a novel bid-price-based revenue management approach to solve this decision problem. The production system is modeled using clearing functions to capture the non-linear inter-dependency of workload and lead times in stochastic production systems. In extant literature, a common approach to cope with variability in a production system is to introduce fixed, workload-independent lead times. We show in a numerical study that our newly developed approach based on clearing functions clearly outperforms this fixed lead time approach.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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