Optimizing Demand Re-Allocation under Fixed Capacity Commitments
The automotive industry is suffering from large supply-chain disruptions and restrictions, and sourcing contracts are signed during concept and design phases, fixing capacity commitments years ahead of time based on highly inaccurate demand fore- casts. Companies struggle with demand variation and t...
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Thesis |
| Published: |
Massachusetts Institute of Technology
2022
|
| Online Access: | https://hdl.handle.net/1721.1/146650 |
| _version_ | 1811077982233559040 |
|---|---|
| author | Quintella Correia, Felipe |
| author2 | Chun, Jung-Hoon |
| author_facet | Chun, Jung-Hoon Quintella Correia, Felipe |
| author_sort | Quintella Correia, Felipe |
| collection | MIT |
| description | The automotive industry is suffering from large supply-chain disruptions and restrictions, and sourcing contracts are signed during concept and design phases, fixing capacity commitments years ahead of time based on highly inaccurate demand fore- casts. Companies struggle with demand variation and the inability of the supply-chain to react, with suppliers having limited ability to respond to updated demand signals and varying market conditions. This thesis proposes an algorithmic solution to optimize allocation of demand order volumes into different product types when supply capacity is constrained, while trying to maintain the originally requested mix shares and volumes as much as possible.
The model allows the company to approach supply-chain flexibility under a different lens and the results demonstrate the volume and financial improvements to current processes, with analyzed used cases showing an increased volume output of 10% and profit increases of up to 11% over a manual re-allocation process, or 7% increases when constraining the model to a lower volume output. Finally, a few additional model improvements are suggested as grounds for future work. |
| first_indexed | 2024-09-23T10:51:31Z |
| format | Thesis |
| id | mit-1721.1/146650 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T10:51:31Z |
| publishDate | 2022 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/1466502022-12-01T03:32:52Z Optimizing Demand Re-Allocation under Fixed Capacity Commitments Quintella Correia, Felipe Chun, Jung-Hoon Zheng, Y. Karen Massachusetts Institute of Technology. Department of Mechanical Engineering Sloan School of Management The automotive industry is suffering from large supply-chain disruptions and restrictions, and sourcing contracts are signed during concept and design phases, fixing capacity commitments years ahead of time based on highly inaccurate demand fore- casts. Companies struggle with demand variation and the inability of the supply-chain to react, with suppliers having limited ability to respond to updated demand signals and varying market conditions. This thesis proposes an algorithmic solution to optimize allocation of demand order volumes into different product types when supply capacity is constrained, while trying to maintain the originally requested mix shares and volumes as much as possible. The model allows the company to approach supply-chain flexibility under a different lens and the results demonstrate the volume and financial improvements to current processes, with analyzed used cases showing an increased volume output of 10% and profit increases of up to 11% over a manual re-allocation process, or 7% increases when constraining the model to a lower volume output. Finally, a few additional model improvements are suggested as grounds for future work. M.B.A. S.M. 2022-11-30T19:39:02Z 2022-11-30T19:39:02Z 2022-05 2022-08-25T19:15:42.431Z Thesis https://hdl.handle.net/1721.1/146650 0000-0001-5339-286X In Copyright - Educational Use Permitted Copyright retained by author(s) https://rightsstatements.org/page/InC-EDU/1.0/ application/pdf Massachusetts Institute of Technology |
| spellingShingle | Quintella Correia, Felipe Optimizing Demand Re-Allocation under Fixed Capacity Commitments |
| title | Optimizing Demand Re-Allocation under Fixed Capacity Commitments |
| title_full | Optimizing Demand Re-Allocation under Fixed Capacity Commitments |
| title_fullStr | Optimizing Demand Re-Allocation under Fixed Capacity Commitments |
| title_full_unstemmed | Optimizing Demand Re-Allocation under Fixed Capacity Commitments |
| title_short | Optimizing Demand Re-Allocation under Fixed Capacity Commitments |
| title_sort | optimizing demand re allocation under fixed capacity commitments |
| url | https://hdl.handle.net/1721.1/146650 |
| work_keys_str_mv | AT quintellacorreiafelipe optimizingdemandreallocationunderfixedcapacitycommitments |