Date of Award

1987

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Marketing (Business Administration)

Abstract

Planned procurement quantities in made-to-order production programs are often altered after production has started. Cost analysts are concerned about providing cost estimates for alternatives to ongoing programs. This research develops a new model for repricing made-to-order production programs. It is an effort to integrate a theoretically developed production phase prediction model into a comprehensive repricing model. The production model is defined by a cost function that employs the impact of two cost determinants, production rate and learning. It is supported by economic theory and is consistent with our knowledge of made-to-order production process. The theoretical model links the direct costs to delivery schedules under the assumption that the firm attempts to optimize production rate over time. Actual delivery schedule data are used in the estimation of the direct variable cost. The repricing model, besides the direct variable cost, also considers the effects of fixed cost, business base, and expenditure profile. An explicit decision support system is developed that utilizes the model. This support system is used to test the validity of the model and to illustrate the estimation results.

Pages

131

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