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An integrated emergency ordering and production planning optimization model with demand and yield uncertainty

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  • Ehsan Mardan
  • Mohsen Sadegh Amalnik
  • Masoud Rabbani

Abstract

This paper proposes an integrated emergency ordering and production planning scheme for a multi-item, multi-product problem in which each product is composed of several ingredients. Each item can be supplied from both cheap unreliable suppliers prone to yield uncertainty and expensive reliable suppliers. A two-stage decision-making process is proposed in which orders are placed to the unreliable suppliers during the first stage and an emergency order can be placed in the second stage. In addition, a flexible backup ordering contract between the buyer and emergency supplier is proposed. A similar two-stage decision-making process is considered for production planning, where in the first stage, the main production plan is determined and in the second stage, the decision about a limited increase in the production plan is made as an emergency decision. An integrated ordering and production planning decision process is proposed for the problem. The value of emergency decisions, including the value of emergency ordering and the value of emergency production planning evaluates the effectiveness of the emergency decisions. Due to the staggering size of the problem, sample average approximation method is used to solve the problem.

Suggested Citation

  • Ehsan Mardan & Mohsen Sadegh Amalnik & Masoud Rabbani, 2015. "An integrated emergency ordering and production planning optimization model with demand and yield uncertainty," International Journal of Production Research, Taylor & Francis Journals, vol. 53(20), pages 6023-6039, October.
    • Handle: RePEc:taf:tprsxx:v:53:y:2015:i:20:p:6023-6039
    DOI: 10.1080/00207543.2015.1008109
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    Cited by:

    1. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2020. "Tactical sales and operations planning: A holistic framework and a literature review of decision-making models," International Journal of Production Economics, Elsevier, vol. 228(C).
    2. Mohammed Hichame Benbitour & Evren Sahin & Yves Dallery, 2019. "The use of rush deliveries in periodic review assemble-to-order systems," Post-Print hal-01997380, HAL.
    3. Wei Xu & Dong-Ping Song, 2022. "Integrated optimisation for production capacity, raw material ordering and production planning under time and quantity uncertainties based on two case studies," Operational Research, Springer, vol. 22(3), pages 2343-2371, July.

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