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Dynamic order acceptance and scheduling problem with sequence-dependent setup time

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  • Lei Xu
  • Qian Wang
  • Simin Huang

Abstract

This paper studies the order acceptance and scheduling problem under a single machine environment when the orders come stochastically during the planning horizon and a sequence-dependent setup time is required between the processing of different types of orders. The objective is to maximise the expected revenue subject to the due date constraints. The problem is formulated as a stochastic dynamic programming model. A rule based on the opportunity cost of the remaining system capacity for the current system state is proposed to make the order acceptance decisions. The remaining system capacity is estimated by a heuristic which generates a good schedule for the accepted orders. Its opportunity cost is estimated by both mathematical programme and greedy heuristic. Computational experiments show that the profit generated by the integrated dynamic programming decision model is much higher than the widely used first-come-first-accept policy in industries and the benefit increases with the length of planning horizon, the arrival rate and the length of lead time. Acceptance decision based on mathematical programming outperforms greedy heuristic by about 7% and its computational time is short. It also shows that the quality of the solutions generated by the opportunity cost based order acceptance rule is satisfactory.

Suggested Citation

  • Lei Xu & Qian Wang & Simin Huang, 2015. "Dynamic order acceptance and scheduling problem with sequence-dependent setup time," International Journal of Production Research, Taylor & Francis Journals, vol. 53(19), pages 5797-5808, October.
    • Handle: RePEc:taf:tprsxx:v:53:y:2015:i:19:p:5797-5808
    DOI: 10.1080/00207543.2015.1005768
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    Cited by:

    1. Perea, Federico & Yepes-Borrero, Juan C. & Menezes, Mozart B.C., 2023. "Acceptance Ordering Scheduling Problem: The impact of an order-portfolio on a make-to-order firm’s profitability," International Journal of Production Economics, Elsevier, vol. 264(C).
    2. Tugba Saraç & Feristah Ozcelik & Mehmet Ertem, 2023. "Unrelated parallel machine scheduling problem with stochastic sequence dependent setup times," Operational Research, Springer, vol. 23(3), pages 1-19, September.
    3. Chen, Wenchong & Gong, Xuejian & Rahman, Humyun Fuad & Liu, Hongwei & Qi, Ershi, 2021. "Real-time order acceptance and scheduling for data-enabled permutation flow shops: Bilevel interactive optimization with nonlinear integer programming," Omega, Elsevier, vol. 105(C).
    4. Amirhosein Gholami & Nasim Nezamoddini & Mohammad T. Khasawneh, 2023. "Customized orders management in connected make-to-order supply chains," Operations Management Research, Springer, vol. 16(3), pages 1428-1443, September.
    5. Ana Rita Antunes & Marina A. Matos & Ana Maria A. C. Rocha & Lino A. Costa & Leonilde R. Varela, 2022. "A Statistical Comparison of Metaheuristics for Unrelated Parallel Machine Scheduling Problems with Setup Times," Mathematics, MDPI, vol. 10(14), pages 1-19, July.
    6. Mohamadreza Dabiri & Mehdi Yazdani & Bahman Naderi & Hassan Haleh, 2022. "Modeling and solution methods for hybrid flow shop scheduling problem with job rejection," Operational Research, Springer, vol. 22(3), pages 2721-2765, July.
    7. Klein, Robert & Koch, Sebastian & Steinhardt, Claudius & Strauss, Arne K., 2020. "A review of revenue management: Recent generalizations and advances in industry applications," European Journal of Operational Research, Elsevier, vol. 284(2), pages 397-412.

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