An Integrated Model of Pricing and Production in Assemble to Order Production System

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Taslimi, Bijan | 2016

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 48561 (01)
University: Sharif University of Technology
Department: Industrial Engineering
Advisor(s): Modarres Yazdi, Mohammad
Abstract:
In this research, we consider an assemble-to-order production system which accepts order for multi-products. Demand is stochastic and price-dependent. We also consider a sale index that links demand of each period to the previous periods demand. The variety of products which use common parts makes this revenue management system complicated. Furthermore, since the price of each product can have an effect on other products demand, it causes price dependency among them. We model the problem within the framework of dynamic programming approach to maximize discounted profit of the firm during a finite and multi-period horizon. We develop an integrated system of pricing and production decisions which includes products pricing for normal and expedited ordering of the required parts and production quantity of the products. Then we investigate the structure of optimal solution to characterize optimal policies. Depending on the assumption of restricted or unrestricted production capacity and also base on price dependency among products, we consider four cases and present appropriate policies in each case. Finally, we solve some numerical examples in each situation in order to illustrate our proposed approach
Keywords:
Pricing ; Assemble to Order (ATO) ; Integrated System ; Dynamic Programming

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