Pricing Policies of Excess Capacity in Make to Order Production Systems

The research concerns a make to order manufacturing environment and two classes of customers who submit orders. The core customers have a contract with the firm at fixed services level (price and due date). The short-term customers submit the orders based on the price set by the firm. In this paper, it is proposed a pricing policy based on fuzzy logic to set the price for the short-term customers. The fuzzy approach captures the state of the manufacturing systems in terms of congestion in order to set the price. The policy proposed is compared to a fixed price, and to a state-dependent policy based on three levels of price. A discrete event simulation environment is used to test the proposed approach in a static, dynamic environment and considering the reliability of the manufacturing system. The simulation results show how the proposed approach outperforms the other policies in all conditions tested.