Integrated market selection and production planning: complexity and solution approaches Academic Article uri icon

abstract

  • Emphasis on effective demand management is becoming increasingly recognized as an important factor in operations performance. Operations models that account for supply costs and constraints as well as a supplier's ability to influence demand characteristics can lead to an improved match between supply and demand. This paper presents a class of optimization models that allow a supplier to select, from a set of potential markets, those markets that provide maximum profit when production/procurement economies of scale exist in the supply process. The resulting optimization problem we study possesses an interesting structure and we show that although the general problem is NP -complete, a number of relevant and practical special cases can be solved in polynomial time. We also provide a computationally very efficient and intuitively attractive heuristic solution procedure that performs extremely well on a large number of test instances. 2011 The Author(s).

published proceedings

  • MATHEMATICAL PROGRAMMING

author list (cited authors)

  • Van den Heuvel, W., Kundakcioglu, O. E., Geunes, J., Romeijn, H. E., Sharkey, T. C., & Wagelmans, A.

citation count

  • 14

complete list of authors

  • Van den Heuvel, Wilco||Kundakcioglu, O Erhun||Geunes, Joseph||Romeijn, H Edwin||Sharkey, Thomas C||Wagelmans, Albert PM

publication date

  • September 2012