Probabilistic assessment of loss in revenue generation in demand-driven production

Publication Type:
Journal Article
Journal of Intelligent Manufacturing, 2012, 23 (6), pp. 2069 - 2084
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In Demand-driven Production with Just-in-Time inputs, there are several sources of uncertainty which impact on themanufacturer's ability to meet the required customer's demand within the given time frame. This can result in a loss of revenue and customers, which will have undesirable impacts on the financial aspects and on the viability of the manufacturer.Hence, a key concern for manufacturers in justin- time production is to determine whether they can meet a specific level of demand within a given time frame, to meet the customers' orders and also to achieve the required revenue target for that period of time. In this paper, we propose a methodology by which a manufacturer can ascertain the probability of not meeting the required demand within a given period by considering the uncertainties in the availability of production units and raw materials, and the loss of financial revenue that it would experience as a result. © Springer Science+Business Media, LLC 2011.
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