A robust optimization model for production planning of perishable products

Abstract

In this study, a robust optimization model is developed to solve production planning problems for perishable products in an uncertain environment in which the setup costs, production costs, labour costs, inventory costs, and workforce changing costs are minimized. Using the concept of postponement, the production process for perishable products is differentiated into two phases to better utilize the resources. By adjusting penalty parameters, decision-makers can determine an optimal production loading plan and better utilize resources while considering different economic growth scenarios. A case from a Hong Kong plush toy company is studied and the characteristics of perishable products are discussed. Numerical results demonstrate the robustness and effectiveness of the proposed model. An analysis of the trade-off between solution robustness and model robustness is also presented.

Keywords:

• production management
• stochastic programming
• robustness
• perishable

Acknowledgements

We thank the anonymous referees for their valuable comments.