SUNConferences, Computers and Industrial Engineering 42

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Order Allocation Among Multiple Supplies By Production Load-Equilibrium
Wei Xiang, Fashuai Song, Feifan Ye

Last modified: 2012-06-20


A useful approach to ensure the reliability of a manufacturer’s supply stream in a make-to-order environment is to follow a multiple sourcing. In this situation, a firm purchases the same item from more than one vendor. In this paper, a new strategy for order splitting is proposed, in which an order is allocated among a group of supplies according to their production load-equilibrium. The order allocation models of single-manufacturer vs. multi-suppliers under the proposed new strategies and normal capacity-based strategy are developed. Considering the uncertainties of demand and production capacity of enterprise, the discrete event system simulation is used to verify that the production load-equilibrium strategy outperforms to the capacity-based strategy in general. The results show that production load equilibrium strategy can not only guarantee the order’s lead time, but also the equilibrium utilization of the suppliers’ manufacturing resources, which leads to promote the whole supplier group’s operation level and to realize the optimization of the entire supply chain.

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