Production Planning with Price-Dependent Supply Capacity
Z. Melis Teksan is a Ph.D. Candidate in the Industrial and Systems Engineering department at the University of Florida. She received her B.S. and M.S. degrees in the Industrial Engineering department at Bogazici University. During her Master’s study, she also worked in several positions for ICRON Technologies, including senior consultant, project manager, and R&D software product developer. Her main research focus lies in the field of production planning and inventory theory, and, in general, she is interested in research problems that are relevant to real-life industry practice.
Date & Time
14 December 2015 - 14:00
We consider a producer who procures an input component for production by offering a price to suppliers. The available supply quantity for the production input depends on the price the producer offers, and this supply level constrains production output. The producer seeks a time-phased production and supply-pricing plan that minimizes the cost incurred while meeting a set of demands over a finite horizon consisting of a discrete number of time periods. We model the problem as a finite-horizon, discrete-time production and component-supply-pricing planning problem with non-stationary costs, demands, and component supply levels. This leads to a class of two-level lot-sizing problems with objective functions that are neither concave nor convex. Although the most general version of the problem is NP-Hard, we provide polynomial-time algorithms for practical special cases. We then apply the resulting algorithms heuristically to the more general problem version, and provide computational results that demonstrate the high performance quality of the resulting heuristic solution methods.