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Configuration and evaluation of an integrated demand management process using a space-filling design and Kriging metamodeling

Maha Ben Ali, Sophie D'Amours, Jonathan Gaudreault and Marc-André Carle

Article (2018)

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Abstract

Objective: This research aims to develop a basic understanding of a demand management process inte- grating sales and operations planning (S&OP) and order promising in a Make-To-Stock environment and to compare different demand management policies with limited capacity. Contribution: Typical researches about demand management processes analyze few system specifications or vary few potential factors one at a time. Yet, additional insights can be obtained by employing a space- filling design and Kriging metamodeling for analysis. Methodology: We compare two configurations of the integrated demand management process. While the First-Come First-Served concept is used at the order promising level for the first configuration, the sec- ond configuration uses nested booking limits and gives advantage to profitable customers and attractive periods. Considering various order arrival sequences, we generate Kriging metamodels that best describe the nonlinear relationships between four environmental factors (demand intensity, demand forecast er- ror, customer heterogeneity and coefficient of variation) and three performance measures (yearly profit margin, yearly sales and high-priority fill rate) for Canadian softwood lumber firms. Since our simulation experiments are time-consuming, we employ a Latin hypercube design to efficiently take into account different market situations. Results: Our analysis reveals the potential to improve the performance of the demand management pro- cess if we know high-priority customers needs before fulfilling low-priority orders and if we use nested booking limits concept.

Uncontrolled Keywords

Integrated demand management process; Sales and operations planning; Revenue management; Space-filling design; Kriging; Softwood lumber industry

Subjects: 1600 Industrial engineering > 1600 Industrial engineering
2950 Applied mathematics > 2950 Applied mathematics
Department: Department of Mathematics and Industrial Engineering
Funders: CRSNG/NSERC
PolyPublie URL: https://publications.polymtl.ca/4779/
Journal Title: Operations Research Perspectives (vol. 5)
Publisher: Elsevier
DOI: 10.1016/j.orp.2018.01.002
Official URL: https://doi.org/10.1016/j.orp.2018.01.002
Date Deposited: 08 Apr 2021 10:02
Last Modified: 04 Dec 2023 11:28
Cite in APA 7: Ben Ali, M., D'Amours, S., Gaudreault, J., & Carle, M.-A. (2018). Configuration and evaluation of an integrated demand management process using a space-filling design and Kriging metamodeling. Operations Research Perspectives, 5, 45-58. https://doi.org/10.1016/j.orp.2018.01.002

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