Profit maximization in simultaneous lot-sizing and scheduling problem

Abstract This paper extends the simultaneous lot-sizing and scheduling problem, to include demand choice flexibility. The basic assumption in most research about lot-sizing and scheduling problems is that all the demands should be satisfied. However, in a business with a goal of maximizing profit, meeting all demands may not be an optimum decision. In the profit maximization simultaneous lot-sizing and scheduling problem with demand choice flexibility, the accepted demand in each period, lot-sizing and scheduling are three problems which are considered simultaneously. In other words the decisions pertaining to mid-term planning and short-term planning are considered as one problem and not hierarchically. According to this assumption, the objective function of traditional models changes from minimizing costs to maximizing profits. In this paper, two mathematical models are developed for the problem, and the efficiency of them is evaluated in different problem sets. These two models are different in the method of lot-sizing.

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