Simultaneous quotations with capacity planning under contingent orders

Quotations represent the initial phase in order acceptance/rejection (OA) decisions. Orders for companies remain contingent on demand until decisions are made which is a critical source of uncertainty. This paper proposes a method that can be used to simultaneously quote the due date and the price of each incoming order when the contingent orders exist. It utilizes probabilistic theory and incorporates some theories of negotiation such as the aspiration level and limit level to generate quotations. Instead of a single quotation, it can be used to generate multiple sets of quotations at the same aspiration level of manufacturer. Numerical example is presented to demonstrate the working mechanism, effectiveness and sensitivity of the proposed method.