PROMISE: a distributed DSS approach to coordinating production and marketing decisions

Abstract

This paper deals with coordination of marketing mix and production planning (MMPP) in a functionally decentralized firm operating in a distributed computing environment. Each of production and marketing is assumed to have information autonomy and makes decisions separately with respect to its own local objective. In spite of the apparent need for coordination, most of the previous studies in the literature are mainly concerned with developing operations research models, ignoring the coordination issue. Based on the literature on Computer-Supported Cooperative Work and other computer-based coordination theories, this paper proposes a distributed DSS mechanism named PROduction and Marketing Interface Support Environment (PROMISE) to provide a practical coordination support for the MMPP decisions. The meta layer in PROMISE controls the problem-solving layer consisting of marketing and production decision support systems so that optimal MMPP decisions can be reached. To show the validity of our approach, PROMISE has been implemented in Visual Basic language running on local area networked Windows 95 environments. Experimental results show that the proposed PROMISE can be used to provide a practical support for coordinating the MMPP decisions. Scope and purpose Production and marketing are two highly interdependent units in a functionally decentralized firm. Decisions of one function frequently influence the decisions and performance of the other. Without proper coordination of the two functions, the overall performance of a firm will be suboptimal. It is therefore of utmost importance to coordinate production and marketing (PM) decisions. The present study concerns how to coordinate the two functions in the context of marketing mix and production planning (MMPP) decisions. We assume a simple marketing channel where the firm directly contacts with the customers. The main purpose of this paper is to present PROduction and Marketing Interface Support Environment (PROMISE), a two-layered distributed decision support system that can be used in coordinating the MMPP decisions under functional decentralization. The top layer or Meta layer of PROMISE, based on theoretical results of previous studies, monitors the coordination process in order to achieve a highest possible performance level for the entire firm. During the coordination process, Meta layer controls the information exchange process between production and marketing whose optimal decisions are made by their individual DSSs which constitute the lower, Problem-solving layer. PROMISE has been coded in Visual Basic Language, running on local area networked Windows 95 environments.