NEGOTIATING DUE-DATES BETWEEN CUSTOMERS AND PRODUCERS

An important managerial issue in the coordination of the manufacturing-sales interface is the joint determination of order due-dates between customer and manufacturer, mediated by sales personnel. This paper presents a methodology for negotiating due-dates between customers and producers in complex manufacturing environments. This is accomplished by modeling the setting of due-dates as a leadtime forecasting problem, and using the empirical distribution of forecast errors as the basis for negotiating and setting due-dates with customers. These distributions provide the basis for accepting or rejecting customer due-date proposals, and allows the construction of managerially useful trade-off curves between customer due-dates and several alternative performance measures including cost and service-level measures.