Order acceptance for revenue management and capacity allocation in make-to-order batch plants

FACUNDO ARREDONDO; MARTINEZ, ERNESTO

Computer Aided Chemical Engineering

Elsevier

Lugar: Amsterdam; Año: 2010; p. 1189 - 1194

Challenging issues for optimal capacity allocation in make-to-order (MTO) batch plants are fixed manufacturing capacity and a highly diversified product portfolio compounded with pronounced fluctuations in demand and profitability. In this work, revenue management is carried out by maximizing profits under uncertainty in MTO production systems using an intelligent decision rule to dynamically control the inflow of orders. A novel approach for learning and update of an order acceptance policy using data is proposed. Comparisons made with threshold heuristics for capacity control in a multiproduct batch plant highlight superior performance of the dynamic order admission policy resulting from selective order acceptance using revenue management.