A Dynamic Production Planning Model Based on Optimization of a Hybrid Push/Pull System, Considering Demand Uncertainty

Abstract

Given the vast, continuous and increasing changes in global markets and customer demand, the use of powerful and reliable tools to support decision makers is inevitable. For this purpose, in this research, we have tried to address the issue of production planning by considering the system dynamics and uncertainty in customer demand. The production system assumed in this model is a hybrid push-pull production system. By applying this approach, the proposed model is also adapted for a fully push or pull production system. Production planning is usually done in the medium term, and the decisions made at each stage of time will also affect future plans. Therefore, in the face of potential customer demand, the multi-stage stochastic programming method has been used in order to make decisions with a view to the entire time horizon. The purpose of the proposed model is to maximize profits through the optimal use of production capacity, appropriate pricing policies and material resource planning. Finally, the proposed model is examined through conventional numerical analyzes in the stochastic programming method.

Keywords

• hybrid push/pull production system
• demand uncertainty
• multi-stage stochastic programming, available to promise, production planning