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

Publisher:
Springer
Publication Type:
Journal Article
Citation:
Journal of Intelligent Manufacturing, 2012, 23 (3), pp. 2069 - 2084
Issue Date:
2012-01
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In Demand-driven Production with Just-in-Time inputs, there are several sources of uncertainty which impact on themanufacturers ability to meet the required customers 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.
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