Joint Pricing and Production Planning for Fixed Priced Multiple Products with Backorders
|dc.identifier.citation||Caccetta, L. and Mardaneh, E. 2010. Joint Pricing and Production Planning for Fixed Priced Multiple Products with Backorders. Journal of Industrial and management optimization. 6 (1): pp. 123-147.|
In this paper, we present a multiperiod model for production planning in a make-to-stock manufacturing system with constant pricing. We consider a multiproduct capacitated setting and introduce a demand-based model where the demand is a function of the price. There is an assumption that the production setup costs are negligible. A key part of the model is that backorders are allowed. As a result of this, the problem becomes a nonlinear programming problem with the nonlinearities in both the objective function and some constraints. We develop an algorithm that computes the global optimal production and pricing policy on a finite time horizon. We illustrate the application of the algorithm through a detailed numerical example.
|dc.publisher||American Institute of Mathematical Sciences|
|dc.title||Joint Pricing and Production Planning for Fixed Priced Multiple Products with Backorders|
|dcterms.source.title||Journal of Industrial and management optimization|
|curtin.department||Department of Mathematics and Statistics|
|curtin.accessStatus||Open access via publisher|