Probabilistic assessment of loss in revenue generation in demand-driven production

  • Authors:

  • Omar K. Hussain;Tharam Dillon;Farookh Khadeer Hussain;Elizabeth Chang

  • Affiliations:

  • Digital Ecosystems and Business Intelligence Institute, Curtin University of Technology, Perth, Australia;Digital Ecosystems and Business Intelligence Institute, Curtin University of Technology, Perth, Australia;Digital Ecosystems and Business Intelligence Institute, Curtin University of Technology, Perth, Australia;Digital Ecosystems and Business Intelligence Institute, Curtin University of Technology, Perth, Australia

  • Venue:
  • Journal of Intelligent Manufacturing
  • Year:
  • 2012

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Abstract

In Demand-driven Production with Just-in-Time inputs, there are several sources of uncertainty which impact on the manufacturer's ability to meet the required customer's demand within the given time frame. This can result in a loss of revenue and customers, which will have undesirable impacts on the financial aspects and on the viability of the manufacturer. Hence, a key concern for manufacturers in just-in-time production is to determine whether they can meet a specific level of demand within a given time frame, to meet the customers' orders and also to achieve the required revenue target for that period of time. In this paper, we propose a methodology by which a manufacturer can ascertain the probability of not meeting the required demand within a given period by considering the uncertainties in the availability of production units and raw materials, and the loss of financial revenue that it would experience as a result.