Penalty Distribution Method for Scheduling Based Supply Chain Management

Abstract

Trends of globalization and advances in Information Technology (IT) have created opportunity in collaborative manufacturing across national borders. A dynamic supply chain configuration is more adaptable by project based manufacturing environment characterize by the involvement of Small and Medium-sized Enterprises (SMEs). This research proposes a three echelons dynamic supply chain model where a job shop style manufacturer represents the center node being focused that will autonomously negotiates contracts with downstream client and upstream suppliers based on parameters derived from a reactive scheduling engine and an inventory management system. Furthermore a method is proposed to distribute delay penalties of previously contracted jobs to multiple new orders being negotiated simultaneously.