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Abstract Shipbuilding is a typical ‘build to order’ industry. It has a b usiness model that generates revenues from building various ships and offshore pro ducts in accordance with owner’s requirements at each production stage. Under uncertainty in shipping market, it is very essential for the shipbuilder to prepare the fast and competitive decision for product portfolio strategy in order to maximize contribution margin by exploiting production facilities and constraints. In this study, we introduce the unique decisio n supporting methodology for the optimal product portfolio sets based on Theory of Const raints(TOC). This methodology is established by adopting the concept of Drum Buff er Rope(DBR) in constraints planning and Throughput Accounting (TA) in manageme nt accounting of TOC. In addition, Decision Supporting System(DSS) is implemented. Th is DSS system provides a throughput estimator with reflecting the cost structure of ship building industry and a resource simulator built on heuristic algorithms to operate maj or constraint-resources in shipyard such as dock, quay and pre-erection area etc. Several examples are presented to show that the proposed methodology and system can effectively s upport the strategic decision-making process of a global shipbuilding company.

Decision Supporting Methodology and System Based on Theory of Constraints for Optimal Product Portfolio Strategy in Shipbuilding Industry