A hybrid approach to setting order promising times in a supply chain network

This M.Sc study suggests a hybrid approach for setting realistic order promising times for a produce-order manufacturing company operating within a supply chain environment.The proposed hybrid approach combines the analytical and simulation modeling to bring together the advantages of both approaches. In first step, an analytic model minimizing the overall costs of production, distribution, transportation, inventory holding, and shortage costs subject to the various kinds of constraints is developed to generate optimum production and distribution plans. In the second step, another analytic model which incorporates these production plans as constraints is developed to generate optimal scheduling decisions. In the last stage, a simulation model which reflects the dynamic and stochastic nature of manufacturing environment is utilized to evaluate realistically the effects of these scheduling decisions. Mainly, this simulation model helped to set realistic order promising times for customers.