Quoting manufacturing due dates subject to a service level constraint

Abstract

We develop a method for quoting manufacturing due dates to achieve a target service level (percent of orders filled on-time). We posit a very general function for determining leadtimes as a function of work in process and use a control chart method for adjusting the parameters in this function over time. We make almost no assumptions about the nature of the underlying production system (i.e., we do not require any particular distribution of process times, nor do we require that the system be in steady state). Using simulation we show that our method is very accurate for a simple case where an exact analytic solution is possible and that it outperforms other due date quoting methods from the literature in more complex situations.