Available-to-promise-based flexible order allocation in ATO supply chains

Abstract

This paper presents a new available-to-promise (ATP) based order allocation model, which is different from traditional order fulfilment systems in that it considers customer priority in an assemble-to-order (ATO) supply chain environment before the order is fulfilled. First, in terms of customer priority, a pre-allocated model is proposed in order to obtain reserving production capacity ATP and reserving components ATP for each customer class. Then, two order fulfilment models are formulated: the batch order fulfilment model for processing all orders during an order reception period and the real-time order fulfilment model for making order fulfilment decisions when an order arrives immediately. In case that the available production capacity and components are not enough, the ATP searching rules are developed along four dimensions (time dimension, customer demand priority level dimension, product dimension and selling area dimension). Finally, the proposed models are illustrated through an electronic product manufacturing case. The results of the case study show that the performance of the proposed order fulfilment system is better than that of the traditional one.

Keywords:

• supply chain management
• available-to-promise
• order fulfilment
• assemble-to-order

Funding

This work was supported in part by the Specialized Research Fund for the Doctoral Program of Higher Education of China [grant number 20120073110029]; the Interdiscipline Foundation of Shanghai Jiao Tong University [grant number 11JCZ02]; the National Natural Science Foundation of China [grant number 71371123], [grant number 71131005]; and the Europe–China High Value Engineering Network [EC-HVEN Project Number: 295130]. This support is gratefully acknowledged.