A supply chain network system optimum model for rush orders production decision in global manufacturing

To keep globally competitive advantage nowadays, enterprises need to confront the challenge of global manufacturing in the multinational business. In such a business environment, the trend of specialization among enterprises is increasing ever obviously and thus creates the essential for developing the global manufacturing strategy. The global manufacturing strategy endeavors to improve operation efficiency and to reduce production cost by implementing supply chain management (SCM). One of the important issues is how to appropriately allocate production resources and demands for improving the performance of global manufacturing network as well as meeting the diversifying customers' requirements. Manufacturers frequently handle rush orders to rapidly respond to the dynamic market. The economic of scale is not suitable for them to face the rush orders. The unit production cost will increase when the quantity of orders increases. This study develops a network optimal distribution model for supply chain, which effectively dispatchs customers' rush demands to globally dispersed manufacturing facilities. In this proposed global manufacturing network, the developed model considers production and transportation cost functions in each manufacturing facility to determine the production quantity in each facility. Additionally, the mathematical property of the developed network model is also analyzed.