Available‐to‐promise based bidding decision by fuzzy mathematical programming and genetic algorithm

Available‐to‐promise based bidding decision by fuzzy mathematical programming and genetic algorithm

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Article ID: iaor201110295
Volume: 61
Issue: 4
Start Page Number: 993
End Page Number: 1002
Publication Date: Nov 2011
Journal: Computers & Industrial Engineering
Authors: ,
Keywords: programming: integer, scheduling, decision theory
Abstract:

The present study attempts to integrate bidding decisions with order promising and production planning to enhance supplier profitability and service level. This study formulates the bid price and production plan as a mixed integer programming model with fuzzy constraints. The fuzzy constraints represent the decision‐maker’s subjective judgment regarding the customer’s price tolerance. The proposed model combines the advanced available‐to‐promise (AATP) concept to find optimum resource allocation and enable accurate estimations of production costs and delivery dates. The proposed solution procedure determines the optimum bid price by striking a compromise between profitability and the possibility to win the contract. This study develops a genetic algorithm to solve this problem, and provides computer simulated experiments to evaluate the performance of the proposed approach.

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