Abstract
The trade-off between the length of the lead times quoted to the customers and the delivery reliability has been investigated by many authors. However, only a few studies do this in an economic setting. In this study, the setting of cost optimal due dates taking into account lead-time related and tardiness related costs is investigated. More specifically, in setting the internal due dates, which are used for determining the priorities on the shop floor, and in determining the expected order flow time probability density functions which are used for setting the external due dates, the work load is taken into account. From this study, it follows that this approach leads to (much) lower costs as compared to the situation with workload independent order flow time p.d.f.'s.
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