Accounting-based heuristics for order processing and review in a stochastic environment

Abstract

As manufacturers evolve from make-to-stock to make-to-order strategies, they are forced to rely less on inventory to meet demands and more on the effective usage of existing capacity as they determine which orders to accept and schedule. Several accounting-based heuristics are used to identify and accept those jobs that maximize plant throughput. Accounting heuristics have been suggested as surrogates for approximating the opportunity costs of manufacturing one order instead of another order. Research results suggest that the best heuristic is dependent on the balance of the manufacturing resources. Moreover, these tendencies are affected by product mix and load.

Keywords:

• Capacity
• Cost management
• Discrete event simulation