Merging make-to-stock/make-to-order decisions into sales and operations planning: A multi-objective approach

Daniel Filipe Pereira, José Fernando Oliveira and Maria Antónia Carravilla

Omega, 2022, vol. 107, issue C

Abstract: With the advent of mass customization and product proliferation, the appearance of hybrid Make-to-Stock(MTS)/Make-to-Order(MTO) policies arise as a strategy to cope with high product variety maintaining satisfactory lead times. In companies operating under this reality, Sales and Operations Planning (S&OP) practices must be adapted accordingly during the coordinated planning of procurement, production, logistics, and sales activities. This paper proposes a novel S&OP decision-making framework for a flow shop/batch company that produces standard products under an MTS strategy and customized products under an MTO strategy. First, a multi-objective mixed-integer programming model is formulated to characterize the problem. Then, a matrix containing the different strategies a firm in this context may adopt is proposed. This rationale provides a business-oriented approach towards the analysis of different plans and helps to frame the different Pareto-optimal solutions given the priority on MTS or MTO segments and the management positioning regarding cost minimization or service level orientation. The research is based on a real case faced by an electric cable manufacturer. The computational experiments demonstrate the applicability of the proposed methodology. Our approach brings a practical, supply chain-oriented, and mid-term perspective on the study of operations planning policies in MTS/MTO contexts.

Keywords: Sales and operations planning; Make-to-stock and make-to-order; Multi-objective optimization; Managerial policies (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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DOI: 10.1016/j.omega.2021.102561

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