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The simultaneous planning of production, capacity, and inventory in seasonal demand environments. (English) Zbl 1009.90013

Summary: Manufacturing managers often address capacity and inventory decisions separately, thus ignoring the interaction between capacity and inventory within a manufacturing system. The separation of these two decisions can lead to an imbalance of capacity and inventory investment. We develop a model that simultaneously plans capacity investment, inventory investment, and the production schedule using return on assets as the objective to maximize. An algorithm is developed that optimizes a fractional objective function for a mixed-integer program. The model was applied at an electronics manufacturer and at a manufacturer of office supplies.

MSC:

90B05 Inventory, storage, reservoirs

Software:

GAMS
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