Risk analysis and assessment for make-to-order manufacturing

Abstract

Based on the characteristics of make-to-order manufacturing, risks in enterprises are analyzed, which are encountered when receiving orders. Dividing the whole process into three stages, this paper provides a qualitative explanation of the risky factors, failure rate, risk level and changes of each stage, and then provides a mathematic model of quantitative analysis by using fuzzy sets and an analytical hierarchy process. In the light of the relationship among the three stages, a formula for calculating risk levels of orders is worked out. Meanwhile, both economic and non-economic losses due to an order failure are considered in the assessment system. An actual case is analyzed using the described method. Suggestions for risk prevention or loss reduction are given.