Ordering Problem with Known Capacity in Smart Factory

As the Internet of Things (IoT) and big data analytics develop, more information within a smart factory can be collected and shared between manufacturers and retailers through the application of Cyber-Physical Systems. Through the technologies in Industry 4.0, the capacity information can be obtained and shared between the manufacturer and the retailer. With the capacity and demand information, the retailer chooses the optimal ordering time among the multiple ordering opportunities to maximize his profit. We investigate the ordering problem and find it is difficult to obtain a closed form solution for the optimal ordering time due to the supply constraints (capacities). Based on the results we derive, an algorithm is proposed to simplify the ordering policy by relaxing the restrictions on the ordering quantity appropriately.