Delivery Time And Capacity Decision Of Supply Chain Based On MTO Mode

With the rapid development of social economy, people tend to purse taste and fashion, so it is difficult to predict what consumers need as diversified and personalized. Enterprises that cater to the changing attitudes of consumers have to change the traditional mass production mode. Otherwise, there are many substitutable products in a same market segment, the product quality and function tends to be homogeneity, the focus of consumers gradually shift from price to price and lead time. It is in this context that MTO (Make-to-Order) production mode emerged. It can increase production flexibility and reduce the impact of market turmoil.We built a two-level supply chain with one manufacturer and several resellers. Manufacturer’s and resellers’net profit was the objective function, considering the market demand was affected by resellers’retail prices and manufacturer’s promised delivery time. Firstly, the paper studied the Stackelberg game which is dominated by manufacturer under the fixed capacity, compared with the result that without the promised delivery time decision, it proved the necessary of making the promised delivery time decision. Secondly, the paper studied the Stackelberg game considering the adjustment of capacity. The adjustment of capacity was divided to two conditions: adjustment under the current maximal capacity and make capacity investment. After the decision-making process, the paper made sensitivity analysis of related parameters.Matlab was used to make numerical simulations, we can find that the profit of manufacturer could be increased by making the decisions of promised delivery time and capacity. In addition, when the parameters of one reseller changed, the manufacturer’s and resellers’decisions would change. The changes of the parameters changed reseller was obviously different from the changes of the parameters unchanged resellers.