Joint manufacturing and marketing decision analytic model

Decision analysis (DA) is a rigorous tool which incorporates uncertainties, obtains the value of information and indeed helps the firm to evaluate if the current project is a sound one. In fact many industries fall into the trap where every department within the organization has different objective. It is first important that profit is the main goal across the organization. The proposed methodology is to combine the manufacturing and marketing decisions so that there is no conflict across the organization. The DA model combines different marketing and manufacturing stages and tasks. These include marketing research (customer needs identification and product attributes specification), product development (which includes product architecture definition, subsystem identification, prototyping and interfaces), manufacturing (which includes process design for ramp-up and full production), and supply chain design (which may involve a large number of suppliers).Manufacturing generally involves enormous uncertainties. Two major uncertainties which influence profit are product demand and process quality. Demand is a function of price and quality which are marketing decisions. Therefore, the firm (or the decision maker) has the option to purchase complete demand information at either the lowest or the highest potential prices. Then the demand distribution at each price is updated.