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An integrated marginal analysis approach for build-to-order products

Sato, Yuji; Tan, Kim Hua; Tse, Ying Kei

Authors

Yuji Sato

KIM TAN kim.tan@nottingham.ac.uk
Professor of Operations and Innovation Management

Ying Kei Tse



Abstract

This paper proposes an integrated Marginal Analysis Directed Branch and Bound (MA) and Analytic Hierarchy Process (AHP) approach to support managerial decision making. MA was developed in the 1990s to direct the design process of a complex material handling system in which a combined economic and performance justification path assists engineers in making the final judgment. The analytical procedure consists of a branching and bounding approach to criteria and alternatives, which makes the decision process transparent and provides a visualized decision path for decision makers. It has been widely employed in technology selection problems under uncertainty. In the procedure, however, the acceptance or rejection of an alternative is determined based on a priority ranking of criteria that is not capable of sensitively reflecting the decision maker's preference for a result. Since MA is most effective when the sensitivity of criteria is substantial in decision making, clarifying not only the priority rank but also the degree of importance of each criterion would thus be crucial. This paper applies AHP to the decision-making process, expanding the analysis method to allow for the decision maker's preference. A case study ascertains the validity of the proposed approach. The results obtained further suggest the possibility of expanding the approach to the diagnosis process of a user's preference in product specification optimization (viz. build-to-order manufacturing products).

Journal Article Type Article
Acceptance Date Aug 2, 2015
Online Publication Date Aug 10, 2015
Publication Date 2015-12
Deposit Date Mar 11, 2019
Journal International Journal of Production Economics
Print ISSN 0925-5273
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 170
Issue Part B
Pages 422-428
DOI https://doi.org/10.1016/j.ijpe.2015.08.001
Keywords Marginal analysis; Preference; Diagnosis; Build-to-order products; Analytic hierarchy process
Public URL https://nottingham-repository.worktribe.com/output/1624758
Publisher URL https://www.sciencedirect.com/science/article/pii/S0925527315002868
Additional Information This article is maintained by: Elsevier; Article Title: An integrated marginal analysis approach for build-to-order products; Journal Title: International Journal of Production Economics; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.ijpe.2015.08.001; Content Type: article; Copyright: Copyright © 2015 Elsevier B.V. All rights reserved.