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A new mathematical approach in integration of activity-based costing information in supply chain order management

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3 Author(s)
Amir H. Khataie ; Mechanical and Industrial Engineering Department, Concordia University, 1455 Maisonneuve West, Montréal, Canada ; Akif A. Bulgak ; Juan J. Segovia

Available-to-promise (ATP) is a very important and critical supply chain management concept. Its purpose is to treat the actual and potential demands in a way for a company to obtain the largest possible profit. Optimization is a tool that can help in this subject and provides a reliable decision based on the availability of the production resources and the profitability of the products orders. Activity-based costing (ABC) increases the accuracy of the estimation of the profit that each product or order yields through the proper assignment of the overhead costs. This study presents a pull-based ATP optimization model to manage the actual orders effectively through the integration of ABC and mixed integer programming (MIP).

Published in:

Computers & Industrial Engineering, 2009. CIE 2009. International Conference on

Date of Conference:

6-9 July 2009