Order selection optimization in hybrid make-to-order and make-to-stock markets

The order selection process for firms operating in markets characterized by standard products as well as strong product customization, is directly tie d to the customer and to the associated production costs. This order select ion process must be inter-functional with marketing and manufacturing in de ciding which orders to accept, specially since the selection criteria used by marketing and manufacturing tend to differ. This paper develops a method ology/mathematical programming model for improving this coordination throug h an optimal selection of sales orders, such that die total financial contr ibution of selected orders is maximized. Based on an actual case study in t he pigment manufacturing industry, the methodology provides for a user inte rface that addresses both the manufacturing and marketing department. More importantly, such a marketing/production coordination allows for improved p erformance in increasingly segmented (customized) markets, while continuing standard product lines as well.