Manufacturing Systems with Delivery Time Guarantee

  • Wai Ki Ching
Part of the Springer Monographs in Mathematics book series (SMM)


In this chapter, we study production planning in a manufacturing system under Delivery Time Guarantees (DTG). DTG policy is a marketing strategy used by many commercial companies to attract and retain customers. Here are some examples of DTG policies used by different companies. United Parcel Services (UPS) guarantees next-day delivery by 8:30 am. Pizza Hut in Hong Kong offers a free pizza if the ordered pizza cannot be served within 20 minutes. Lucky, a major supermarket chain in California, use a “three’s a crowd” campaign, which guarantees a new checkout counter will be open if there are more than three people waiting in its checkout queue. Wells Fargo Bank offers a “five minute maximum wait policy” which offers five dollars to the customer if the customer waits for more than five minutes in line. We note that a DTG works under the condition that each customer is given a guaranteed quality of service. But in the mentioned examples if a company fails to fulfill its promise, it will lead to the loss of money, customers, and even the reputation of the company; see [16, 36, 44, 63, 64, 88].


Manufacturing System Delivery Time Inventory Level Penalty Cost Unit Price 
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Copyright information

© Springer-Verlag London 2001

Authors and Affiliations

  • Wai Ki Ching
    • 1
  1. 1.Faculty of Mathematical StudiesUniversity of SouthamptonHighfield SouthamptonUK

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