Make-to-order/make-to-stock partitioning decision using the analytic network process

Abstract

This paper presents a decision-making structure to determine the appropriate product delivery strategy for different products in a manufacturing system. These strategies include make-to-stock (MTS), make-to-order (MTO), and hybrid MTS/MTO production systems. In fact, the proposed approach gets the decision maker the opportunity to benefit from both strategies through applying the hybrid one. There are varieties of driving factors involved in choosing the right product delivery strategy, and all these factors have positive and negative interactions with each others; in this regard, we apply an appropriate multi-criteria decision-making method. In this method, relevant criteria affecting MTS/MTO partition are split into four categories: market-related criteria, product-related criteria, process-related criteria, and supplier-related criteria. Due to the interdependency between these criteria, we use analytic network process that generalizes analytic hierarchical process by considering the interdependencies among factors. Finally, in order to show the applicability of the proposed structure in practice, the structure is implemented to choose the best production policy among three aforementioned strategies in the real industrial case company.