(A) multi-product single-facility production planning model when demand timing is uncertain

Abstract

A multi-product, single-facility production planning model is analyzed, in which demand quantities are known, but there is uncertainty as to which period demands occur. In the model, in every production period the single facility produces a certain number, of products (items) each taking a fixed part of the production amount (activity). Concave production costs and piecewise concave inventory costs are considered. The structure of an optimal production plan is characterized and then used in a dynamic programming algorithm for the optimal solution search. A numerical example is presented for illustration.