Autonomous capacity planning by negotiation against demand uncertainty

Abstract

The investment on facilities for high-tech manufacturing requires a large amount of budget. One of the challenging issues for a firm is how to allocate finite budget to its factories and to fully utilize limited manufacturing resources. In this study, we develop a model to negotiate budget allocation among factories. During the negotiation, factories are modeled as intelligent agents and exchange a serie of messages with each others as bargaining over capital. A negotiation mechanism is designed in the study to mimic the attitude of a factory. Intrinsic and budget utility are used as performance indices to observe the behaviors of negotiation trajectories. The influence of the demand uncertainty are discussed under different settings of the negotiation-tactic combinations. Experimental outcomes have empirically justified that, the demand uncertainty significantly harms the social-welfare under the information asymmetric environment. © Springer-Verlag London Limited 2009.