Penalty Distribution Method for Scheduling Based Supply Chain Management

Abstract

Trends of globalization and advances in Information Technology (IT) havecreated opportunity in collaborative manufacturing across nationalborders. A dynamic supply chain configuration is more adaptable byproject based manufacturing environment characterize by the involvementof Small and Medium-sized Enterprises (SMEs). This research proposes athree echelons dynamic supply chain model where a job shop stylemanufacturer represents the center node being focused that willautonomously negotiates contracts with downstream client and upstreamsuppliers based on parameters derived from a reactive scheduling engineand an inventory management system. Furthermore a method is proposed todistribute delay penalties of previously contracted jobs to multiple neworders being negotiated simultaneously.