Development of Mulit-Site and Mulit-Products Supply Chain Analytical Model in the MTS/CTO Production Environment

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After Taiwan joined the WTO, the government and companies have faced the hardest stern than never. The Mechanical Industry must take into account the process of reforming, due to the transformation of production environment from ETO/MTO to MTS/CTO. Companies apply different production principles to interact with one another and result in a complex network. It increases the complexity to manage a multi-level and multi-factory supply chain, especially, when supplier capacity, due date, and inventory issues are considered. As a result, different production strategy makes different effect. Therefore, how to reduce the activity cost of supply chain and improve the entire chain effectiveness becomes an important research topic. A multi-product type and multi-level supply chain formed by machinery manufacturer and its upstream suppliers is studied in this research. We develop an integer programming model under CTO/MTS production environment with the objective function to minimize the overall costs for production, stock out, inventory and delivery delayed. The goal is to determine the production quantity, the MTS’s stock quantity and purchase quantity of item based on BOM of multiple products. We wish the research does help enterprises to solve the problem faced at present.