Dynamic Bid Pricing for an Optimized Resource Utilization in Small and Medium Sized Enterprises

Abstract

Sales revenues of small and medium-sized enterprises are subject to seasonal fluctuation. This leads often to overloaded or underutilized manufacturing resources. Either way, this results in revenue losses. Therefore, companies have to optimize their resource utilization. This paper describes a new methodology for a dynamic bid price system by using correlations of revenue management in production planning to level the resource utilization. The methodology supports especially small and medium-sized enterprises, which are often affected by additional work shifts across seasons. Furthermore, the proposed method points out dependencies between costs and capacity to avoid financial losses. The method has been developed and is being tested in collaboration with two small and medium-sized enterprises. © 2017 The Authors.