Optimal pricing and production master planning in a multi-period horizonconsidering capacity and inventory constraints

Neale R. Smith, Jorge Limón Robles, Leopoldo Eduardo Cárdenas-Barrón, Rosa G. González-Ramírez

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

In this paper we formulate and solve a single item joint pricing and masterplanning optimization problem with capacity and inventory constrains. Theobjective is to maximize profits over a discrete-time multi-period horizon. Thesolution process consists of two steps. First, we solve the single-periodproblem exactly. Second, using the exact solution of the single-period problem,we solve the multi-period problem using a dynamic programming approach. Thesolution process and the importance of considering both capacity and inventoryconstraints are illustrated with a numerical example. ICIC International
Original languageAmerican English
Pages (from-to)495-500
Number of pages6
JournalICIC Express Letters
Volume3
Issue number3
StatePublished - 1 Sep 2009
Externally publishedYes

Keywords

  • Capacity
  • Inventory
  • Pricing
  • Production planning

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