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Resource portfolio planning of make-to-stock products using a constraint programming-based genetic algorithm

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  • Wang, S.M.
  • Chen, J.C.
  • Wang, K.-J.

Abstract

The investment on facilities for manufacturing high-tech products requires a large amount of capital. Even though the demands of such products change dramatically, a company is forced to implement some make-to-stock policies apart from a regular make-to-order production, so that the capacity of expensive resources can be highly utilized. The inherent characteristics to be considered include finite budget for investing resources, lump demands of customers, long production horizon, many types of products to mix simultaneously, time value of capital and asset, technology innovation of resources, efficient usage of multiple-function machines, and limited capacity of resources. In addition to revenue gained from products and the salvage/assets of resources, a decision maker also needs to consider costs regarding inventory, backorder, and resource acquisition-related costs through procurement, renting, and transfer. This study thus focuses on the following issues: (i) how to decide on resources portfolio regarding the way and timing of acquisting resources, and (ii) how to allocate resources to various orders in each production period. The goal is to maximize the long-term profit. This study formulates the problem as a non-linear mixed integer mathematical programming model. A constraint programming-based genetic algorithm is developed. It has been demonstrated to solve the problem efficiently.

Suggested Citation

  • Wang, S.M. & Chen, J.C. & Wang, K.-J., 2007. "Resource portfolio planning of make-to-stock products using a constraint programming-based genetic algorithm," Omega, Elsevier, vol. 35(2), pages 237-246, April.
    • Handle: RePEc:eee:jomega:v:35:y:2007:i:2:p:237-246
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    References listed on IDEAS

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    1. Swaminathan, Jayashankar M., 2000. "Tool capacity planning for semiconductor fabrication facilities under demand uncertainty," European Journal of Operational Research, Elsevier, vol. 120(3), pages 545-558, February.
    2. Bashyam, T. C. A., 1996. "Competitive capacity expansion under demand uncertainty," European Journal of Operational Research, Elsevier, vol. 95(1), pages 89-114, November.
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    Cited by:

    1. Hsu, P.H. & Wee, H.M. & Teng, H.M., 2010. "Preservation technology investment for deteriorating inventory," International Journal of Production Economics, Elsevier, vol. 124(2), pages 388-394, April.
    2. Smirnov, Dina & van Jaarsveld, Willem & Atan, Zümbül & de Kok, Ton, 2021. "Long-term resource planning in the high-tech industry: Capacity or inventory?," European Journal of Operational Research, Elsevier, vol. 293(3), pages 926-940.
    3. Bian, Yuan & Lemoine, David & Yeung, Thomas G. & Bostel, Nathalie & Hovelaque, Vincent & Viviani, Jean-laurent & Gayraud, Fabrice, 2018. "A dynamic lot-sizing-based profit maximization discounted cash flow model considering working capital requirement financing cost with infinite production capacity," International Journal of Production Economics, Elsevier, vol. 196(C), pages 319-332.
    4. Li, Gang & Jiang, Hongxun & He, Tian, 2015. "A genetic algorithm-based decomposition approach to solve an integrated equipment-workforce-service planning problem," Omega, Elsevier, vol. 50(C), pages 1-17.
    5. Ramasesh, Ranga V., 2010. "Lot-sizing decisions under limited-time price incentives: A review," Omega, Elsevier, vol. 38(3-4), pages 118-135, June.
    6. Cherri, Luiz Henrique & Carravilla, Maria Antónia & Ribeiro, Cristina & Toledo, Franklina Maria Bragion, 2019. "Optimality in nesting problems: New constraint programming models and a new global constraint for non-overlap," Operations Research Perspectives, Elsevier, vol. 6(C).
    7. Martínez-Costa, Carme & Mas-Machuca, Marta & Benedito, Ernest & Corominas, Albert, 2014. "A review of mathematical programming models for strategic capacity planning in manufacturing," International Journal of Production Economics, Elsevier, vol. 153(C), pages 66-85.
    8. Ghasemi, Elaheh & Lehoux, Nadia & Rönnqvist, Mikael, 2024. "A multi-level production-inventory-distribution system under mixed make to stock, make to order, and vendor managed inventory strategies: An application in the pulp and paper industry," International Journal of Production Economics, Elsevier, vol. 271(C).
    9. Yamani Douzi Sorkhabi, Sami & Romero, David A. & Beck, J. Christopher & Amon, Cristina H., 2018. "Constrained multi-objective wind farm layout optimization: Novel constraint handling approach based on constraint programming," Renewable Energy, Elsevier, vol. 126(C), pages 341-353.

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