New Combined Method for Solving the Single Level Capacitated Production Planning Model with Set up Cost, Finite Horizon and Discrete Stochastic Demand
International Journal of Economics, Finance and Management Sciences
Volume 2, Issue 3, June 2014, Pages: 227-230
Received: May 25, 2014; Accepted: Jun. 20, 2014; Published: Jun. 30, 2014
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Seyed Saeid Hashemin, Department of Industrial Engineering, Ardabil Branch, Islamic Azad University, Ardabil, Iran
Elham Mohammadi, Graduate Student in Industrial Engineering, Ministry of Science, Research and Technology ALGHADIR Non-Governmental and Private Higher Education Institution, Tabriz, Iran
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This paper studies the single level capacitated production planning problem with finite horizon (N periods). In each period, Set-up cost, variable cost and inventory cost exist. Also, it is assumed that the demand in each period is a discrete random variable with known probability function. In each period, if demand is bigger than inventory then we will have lost sales. In this case, we have to pay the cost of lost sales otherwise at the end of the period we will have extra products for the next period. At the end of horizon we have to sale the surplus products. In this case, price of one unit of products will be less than variable cost of production. An analytical method is proposed for solving this problem. This method can optimize the expected value of costs. In this method, expected value of costs is estimated by Monte Carlo simulation. Two examples have solved by using the proposed method. Comparison of the answers with solutions of other heuristic methods indicates the advantage of the proposed method.
Capacitated Production Planning, Stochastic Demand, Set Up Cost, Finite Horizon
To cite this article
Seyed Saeid Hashemin, Elham Mohammadi, New Combined Method for Solving the Single Level Capacitated Production Planning Model with Set up Cost, Finite Horizon and Discrete Stochastic Demand, International Journal of Economics, Finance and Management Sciences. Vol. 2, No. 3, 2014, pp. 227-230. doi: 10.11648/j.ijefm.20140203.14
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