Abstract:

The objective of this study is to propose a mixed integer programming model which can help make-to-order (MTO) companies to make proper decisions in accepting or rejecting customers’ orders. The proposed model can solve small capacity planning problems with the objective function of maximizing the profit, with the condition that the orders must be delivered on time. If the company accepts the orders, three decisions can be made within the planning horizon, which are to do the job by normal time, overtime, or to outsource it. A case study was conducted at a MTO company and the proposed model was solved by using ILOG Optimization Programming Language (OPL). The reasonableness of the optimum solution shows that the model is applicable in practice.