The choice of dispatching rules in a shop using internally set due-dates with quoted leadtime and tardiness costs

Setting due-dates poses a dilemma for the manufacturing manager. If the due-dates extend the quoted leadtimes to ensure delivery reliability, the shop incurs the customer’s ire for having such long leadtimes. If they shorten its quoted leadtimes, it faces the prospect of incurring the customer’s wrath for poor delivery reliability. This study examines the trade-offs involved in choosing a dispatching rule in a shop that can set due-dates subject to penalties for the length of the quoted leadtime and tardiness. The results of this study indicate that the shortest processing time rule works well for modest tardiness penalties. As the penalty for tardiness increases, dispatching rules such as first-come, first-serve and first-in-system first-serve, work well. The earliest due-date rule generally does not perform well in this study because of the interaction between the earliest due-date rule and the parameters of the due-date assignment rule. The paper concludes with the discussion of possible extensions of this work.