A decision framework proposal for customer order prioritization: A case study for a structural steel company

Customer order prioritization is a very critical and crucial issue for the manufacturing companies as far as their limited capacities are concerned. When the current awarded projects start to cover large portions of the company's design and manufacturing capacities, the company confronts with the decision problem of choosing which customer order next to allocate the remaining scarce capacities properly. In order to make this decision, related criteria are determined based on the literature survey and confirmations of decision makers, and then customer orders are evaluated with respect to these criteria. As there are several criteria lacking a basis of comparison and causing confliction, a multi criteria decision making process is required. At this study, an Analytic Network Process based decision framework was developed by using the criteria to prioritize customer orders under the limited capacities of a company. The criteria were determined as the potential profit rate per unit of time, the compatibility of potential order with the available capacity, the level of potential future order with higher profit, customer credit of future business opportunity, and the negotiability level of production schedule for the order. Among them, customer credit of future business opportunity criterion was revealed as the most important one. Based on the prioritizations of customer orders, a recommendation was made to the case company. In accordance with this recommendation, the orders having high priorities were chosen and implemented by the company.