Multi-objective framework for process mean selection and price differentiation with leakage effects under price-dependent stochastic demand Academic Article

abstract

• 2018 Elsevier Ltd This paper investigates the process mean selection problem that simultaneously considers pricing, production and quality decisions in a multi-objective context when the manufacturing firm experiences a demand leakage in simultaneously observed price-dependent stochastic demand. The output of the manufacturing process is segregated into two grades sold in primary and secondary markets using a differentiation price as the market segmentation tool. Nonconforming items are reworked at an additional cost and only price-dependent stochastic demand with leakage effects is assumed. Three objectives, expected gross income from sales, expected profit and expected product uniformity are considered in the proposed multi-objective optimization model. Two solution algorithms are proposed, a goal programming approach combined with a simulation based optimization and a multi-objective genetic algorithm. A detailed numerical experimentation is employed to compare the two algorithms.

authors

• Rathinam, Sivakumar

published proceedings

• COMPUTERS & INDUSTRIAL ENGINEERING

author list (cited authors)

• Raza, S. A., Abdullakutty, F. C., Rathinam, S., & Govindaluri, S. M.

citation count

• 11

complete list of authors

• Raza, Syed Asif||Abdullakutty, Faseela Chakkalakkal||Rathinam, Sivakumar||Govindaluri, Srikrishna Madhumohan

publication date

• January 2019

publisher

• Elsevier  Publisher

published in

• Computers and Industrial Engineering  Journal

keywords

• Demand Leakage
• Genetic Algorithm
• Goal Programming
• Multi-objective Optimization
• Price Differentiation
• Price-dependent Stochastic Demand
• Process Mean
• Revenue Management

Digital Object Identifier (DOI)

• 10.1016/j.cie.2018.11.010

start page

• 698

end page

• 708

volume

• 127

URL

• http://dx.doi.org/10.1016/j.cie.2018.11.010