A Robust Optimization Model for Aggregate Production Planning with Postponement Policy

Abstract

The perishable products prices will drop significantly after specified periods, for example a season. Hence, over-production or shortage of such products is associated with loss of profit, respectively. In this paper, optimal aggregate production planning, is determined for the production of perishable products such as seasonal clothing, New Year gifts, calendars and almanacs by postponement policy in uncertainty conditions. The production process for these products is proposed to be divided into two phases, with applying the postponement concept. So, there are three production activities, including direct production, production of semi-finished products, and final assembly. A robust optimization model to solve aggregate production planning for these products will be developed, and the set of data will be used for model validation. The paper model can be used to solve real-world problems of aggregate production planning in an uncertain condition.