A multi-product, multi-period MPS problem subjected to uncertainty demand and production capacity

Abstract

In the current unpredictable economic climate, planning for supply and production, as well as inventory management, face several challenges that have an impact on production costs, holding costs, and even the quality of customer service. The extreme volatility in demand and the constrained production capacity, especially in the Fast Moving Consumer Goods (FMCG) business, are two of the most worrying issues contributing to that disruption. With that problem, this study aims to build a production plan, related to master production schedule (MPS) problem to cope with fuzzy demand and fuzzy production capacity’s limitations and minimize the total production cost including regular time and over time production cost. The procedure of finding the best optimal solution gets through three methods: the fuzzy MPS problem (FMP), Kernel Search Heuristic, the crisp equivalent MIP problem combined with Kernel Search Heuristic respectively with the purpose of deciding the most effective and suitable method giving the minimum total production cost in a short computation time. In this work, the proposed solution is applied for manufacturing companies in general and in FMCG companies in particular.