Research on Capacity Allocation in a Supply Chain System Based on TOC

Abstract

Enterprise optimization can rapidly strip significant "bottom line" costs out of global operations, giving companies a real competitive edge. The benefits of managing supply chain networks by integrating operational, design and financial decisions have been acknowledged by the industrial and academic community. In this paper, we consider a supply chain in which one supplier sells to multiple retailers and suppose that the sum of retailer orders exceeds the supplier's fixed capacity. To balance supply and demand, the supplier must employ an allocation mechanism, an algorithm for converting an infeasible set of orders into a feasible set of capacity assignments, we proposed a optimal allocation mechanism based on Theory of Constraints(TOC) in face of meeting peak demand in certain period for the whole system, and Genetic algorithm(GA) has been selected in solving the optimal model in our work. Furthermore, a numerical example has been implemented to demonstrate the efficiency of our method. © 2012 Springer-Verlag.