SINGLE FACILITY DUE-DATE SETTING WITH MULTIPLE CUSTOMER CLASSES

We consider the interrelated problems of (1) quoting a due date to eac h customer arriving to a production system modeled as a single-server queue and (2) sequencing customer orders once they are in the system. We allow several different classes of customers, each with different p references for lead time and price. We first formulate the problem of quoting due dates under the assumption that customer orders are proces sed on a FCFS basis. Next, we consider the case where the firm has the option to schedule orders in other than FCFS order. For this case, we develop a heuristic for quoting due dates and sequencing orders. Simu lation results suggest that policies that take into account customer p rice and due date preferences in scheduling and quoting due dates sign ificantly outperform due date setting policies that do not.