A order mix decision model for make-to-order enterprise

Make-to-stock and Make-to-order are two generic operation modes commonly used in the manufacturing world. The make-to-order enterprise makes the production systems to produce a product only after it is ordered. The enterprise must decide which orders can be accepted to get the optimal profit and meet the due time. This paper addresses a order mix decision model in a make-to-order operation environment. The mathematical model is proposed to select a set of customer orders to maximize the operational profit such that all the selected orders are fulfilled by their deadline. With a given capacity limit on each resource type and its cost rate, solving this model leads to an optimal production mix for the orders over a given time horizon. The conclusion shows that it is not a optimal choice to accept all customer´s orders although they can be produced before deadline. This paper tells the enterprise how to select the order mix according to the cost and production capacity planning.