A multiple performance analysis of market-capacity integration policies

Abstract

A model that uses simulation augmented with Design of Experiments (DOE) is presented to analyse the performance of a Make-to-Order (MTO) reconfigurable manufacturing system with scalable capacity. Unlike the classical capacity scaling policies, the proposed hybrid capacity scaling policy is determined using multiple performance measures that reflect cost, internal stability and responsiveness. The impact of both tactical capacity and marketing policies and their interaction on the overall performance was analysed using DOE techniques and real case data. In addition to the different insights about the trade-offs involved in capacity planning decisions, the presented results challenged the conventional capacity planning wisdoms in MTO about the negative role of the capacity scalability delay time. Finally the analysis demonstrated the importance of inter-functional integration between capacity and marketing policies. [Received 3 February 2010; Revised 13 August 2010; Accepted 6 September 2010]