MULTI-CRITERIA PROGRAMMING METHODS AND PRODUCTION PLAN OPTIMIZATION PROBLEM SOLVING IN METAL INDUSTRY

1Correspodence to: Tunjo Perić, Faculty of Economics and Business Zagreb, University of Zagreb, Croatia Trg J. F. Kenedija, 10000, Zagreb, Croatia E-mail: tperic@efzg.hr Multi criteria programming is a complex process of determining non-dominated(efficient) solutions from a set of feasible solutions and determining the preferred solution from a set of non-dominated solutions. The basic stages of multi-criteria programming are: 1.Defining system goals and determining ways to achieve these goals 2. Mathematical description of the system and definition of the method of evaluation of the criteria functions 3. Application of existing multi criteria programming methods 4. Making a final decision 5. If the final solution is not accepted, retrieving new information and repeating the process from stage 2 by redefining the task (Opricović, 1986). When solving problems with multi criteria functions, which are at the same time conflicting, decision maker wishes to achieve more than by using only one criterion in selecting of the course of action, satisfying the conditions dictated by the environment, processes, and resources (Perić, 2008). The multi criteria programming is one of the most studied areas of operational research. Numerous methods of multi-criteria programming have been developed, however, we still have a small number of real-world applications of multi-criteria programming. The multi criteria programming is a process with active participation of the decision maker who should recognize the best solution or give some information of his preferences connected to criteria functions. Our goal is to show that we can apply multicriteria programming methods to solve the problems of production planning in the metal industry in a situation where the decision maker is unable to identify the best non-dominated solution and provide additional information about preferences of criteria functions. This paper investigates the possibility and efficiency of application oftwomulti-criteria programming methods (STEM and PROMETHEE) in order to optimize the production plan in a firm from metal industry: the STEM method is used to form the set of non-dominated solutions, while the PROMETHEE method is used to choose the preferred solution from the set of non-dominated solutions. INTRODUCTION DOI:10.21554/hrr.091707 T. PERIĆ, MULTI-CRITERIA PROGRAMMING METHODS... HUMAN, Volume 7, Issue 2, 2017