Tactical production planning in a hybrid Make-to-Stock–Make-to-Order environment under supply, process and demand uncertainties: a robust optimisation model

Abstract

In this paper, we consider a hybrid ‘Make-to-Stock–Make-to-Order’ environment to develop a novel optimisation model for medium-term production planning of a typical multi-product firm based on the competencies of the robust optimisation methodology. Three types of uncertainties: suppliers, processes and customers, are incorporated into the model to construct a robust practical model in an uncertain business environment. The modelling procedure is started with applying deterministic linear programming to develop a new multi-objective approach for the combination of multi-product multi-period production planning and aggregate production planning problems. Then, the proposed deterministic model is transformed into a robust optimisation framework and the solution procedure is designed according to the Lp-Metric methodology. Next, using the IBM ILOG CPLEX optimisation software, the proposed model is evaluated by applying the data collected from an industrial case study. Final results illustrate the applicability of the proposed model.

Keywords Make-to-Stock, Make-to-Order, multi-product, multi-period production planning, aggregate production planning, robust optimisation, uncertainty.