Planning for ramp-ups and new product introductions in the automotive industry: Extending sales and operations planning

Sales and operations planning for ramp-ups and new product introductions in the automotive industry differs significantly from steady-state situations. We identify the ramp-up challenges in collaboration with a large European OEM. To support sales and operations planning for ramp-ups and new product introductions, we develop a mixed-integer linear programming model. In our numerical study, we show that it is necessary to consider complexity in sales and operations planning for ramp-up and new product introduction. Besides lost sales costs, complexity and demand volume are factors that need to be considered in the trade-off for the optimal sequence and timing of the start of production of variants. Furthermore, our analysis shows that rework quantities must be considered during ramp-up planning and that an extreme emphasis on fairness among markets results in less efficient operations and negatively affects sales.