Abstract
We study competitive due-date and capacity management between the marketing and engineering divisions within an engineer-to-order (ETO) firm. Marketing interacts directly with the customers and quotes due-dates for their orders. Engineering is primarily concerned with the efficient utilization of resources and is willing to increase capacity if the cost is compensated. The two divisions share the responsibility for timely delivery of the jobs. We model the interaction between marketing and engineering as a Nash game and investigate the effect of internal competition on the equilibrium decisions. We observe that the internal competition not only degrades the firm's overall profitability but also the serviceability. Finally, we extend our analysis to multiple-job settings that consider both flexible and inflexible capacity.
| Original language | English |
|---|---|
| Pages (from-to) | 390-405 |
| Number of pages | 16 |
| Journal | Naval Research Logistics |
| Volume | 55 |
| Issue number | 5 |
| DOIs | |
| State | Published - Aug 1 2008 |
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Keywords
- Due-date quotation
- Marketing/manufacturing interface
- Serviceability
- Supermodular games
- Tardiness
ASJC Scopus subject areas
- Management Science and Operations Research
Cite this
Delivery-date and capacity management in a decentralized internal market. / Erkoc, Murat; David Wu, S.; Gurnani, Haresh.
In: Naval Research Logistics, Vol. 55, No. 5, 01.08.2008, p. 390-405.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Delivery-date and capacity management in a decentralized internal market
AU - Erkoc, Murat
AU - David Wu, S.
AU - Gurnani, Haresh
PY - 2008/8/1
Y1 - 2008/8/1
N2 - We study competitive due-date and capacity management between the marketing and engineering divisions within an engineer-to-order (ETO) firm. Marketing interacts directly with the customers and quotes due-dates for their orders. Engineering is primarily concerned with the efficient utilization of resources and is willing to increase capacity if the cost is compensated. The two divisions share the responsibility for timely delivery of the jobs. We model the interaction between marketing and engineering as a Nash game and investigate the effect of internal competition on the equilibrium decisions. We observe that the internal competition not only degrades the firm's overall profitability but also the serviceability. Finally, we extend our analysis to multiple-job settings that consider both flexible and inflexible capacity.
AB - We study competitive due-date and capacity management between the marketing and engineering divisions within an engineer-to-order (ETO) firm. Marketing interacts directly with the customers and quotes due-dates for their orders. Engineering is primarily concerned with the efficient utilization of resources and is willing to increase capacity if the cost is compensated. The two divisions share the responsibility for timely delivery of the jobs. We model the interaction between marketing and engineering as a Nash game and investigate the effect of internal competition on the equilibrium decisions. We observe that the internal competition not only degrades the firm's overall profitability but also the serviceability. Finally, we extend our analysis to multiple-job settings that consider both flexible and inflexible capacity.
KW - Due-date quotation
KW - Marketing/manufacturing interface
KW - Serviceability
KW - Supermodular games
KW - Tardiness
UR - http://www.scopus.com/inward/record.url?scp=49149099182&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=49149099182&partnerID=8YFLogxK
U2 - 10.1002/nav.20290
DO - 10.1002/nav.20290
M3 - Article
AN - SCOPUS:49149099182
VL - 55
SP - 390
EP - 405
JO - Naval Research Logistics Quarterly
JF - Naval Research Logistics Quarterly
SN - 0028-1441
IS - 5
ER -