Multi-objective due-date setting in a make-to-order environment

This paper presents a new dual-objective problem of due-date setting over a rolling planning horizon in make-to-order manufacturing and proposes a bi-criterion integer programming formulation for its solution. In the proposed model the due-date setting decisions are directly linked with available capacity. A simple critical load index is introduced to quickly identify the system bottleneck and the overloaded periods. The problem objective is to select a maximal subset of orders that can be completed by the customer requested dates and to quote delayed due dates for the remaining acceptable orders to minimise the number of delayed orders or the total number of delayed products as a primary optimality criterion and to minimise total or maximum delay of orders as a secondary criterion. A weighted-sum program based on a scalarisation approach is compared with a two-level due-date setting formulation based on the lexicographic approach. In addition, a mixed-integer programming model is provided for scheduling customer orders over a rolling planning horizon to minimise the maximum inventory level. Numerical examples modeled after a real-world make-to-order flexible flowshop environment in the electronics industry are provided and, for comparison, the single-objective solutions that maximise total revenue subject to service level constraints are reported.