Simulation-based operational decision analysis at decoupling point in MTS-MTO system

MTS-MTO system combines make-to-stock and make-to-order in a sequential manner and deliveries finished products in two steps. The combination system can lower the cost by taking advantage of economy of scale in MTS for standard semi-finished modules production, and satisfy high product variety by taking advantage of flexibility in MTO. But, its performance will drop when capacity is constrained. We deal with the operational problem by evaluating two joint operational decisions i.e. semi-finished module inventory policy and order admission control, in a simulation model. The numerical results suggest that both operational decisions have important influence on system performance and the impacts of the decision are interlinked. This paper extends current MTS-MTO system study from strategy focused to a new stage of concerning operational decisions.