Optimisation on multi-period raw material procurement and product mixing under uncertain demand via probabilistic multi-objective model approach

Raw material procurement and product mixing planning are two important components in manufacturer industries, based on the fact that they contribute significantly to production cost and profit. This article describes a newly developed mathematical model in the form of multi-objective optimisation, as an alternative approach that is possibly used to improve a multi-period raw material procurement and product mixing plan under uncertain demands. This process is initiated by the formulation of two objective functions, including the amount of the output to be produced, which ought to be maximised, and the minimisation of raw material procurement cost. Subsequently, a weighted objective function was formulated for use in the calculation of Pareto solution, and the optimisation problem was resolved to obtain ideal values for all decision variables. In addition, numerical experiments were also performed, in the model evaluation, resulting in the peak value for each decision variable.