2005 Volume 18 Issue 3 Pages 100-107
Manufacturing systems are classified into make-to-stock (MTS) systems and make-to-order (MTO) systems. In particular, the MTO manufacturing systems have been applied to many enterprises in order to react to consumer's uncertain demands and various requirements. Until now, in the studies for the order splitting policy to some original equipment manufacturers (OEMs) under the MTO manufacturing systems, the expectation of the lead time has been mainly considered. In general, the lead-time has the variability because of the fluctuations of the processing time and the demand. Therefore, when the optimal operation of the MTO manufacturing systems is investigated, we should consider the possibility of the delay for the appointed date of delivery of products. In this study, taking the penalty of the delay of delivery into consideration, we investigate the order splitting policy to two OEMs having the difference in the processing cost and the capacity.