The Production of Several Items in a Single Facility with Linearly Changing Demand Rates

Bret J. Wagner
Department of Management, Haworth College of Business, Western Michigan University, Kalamazoo, MI 49008, e-mail: bret.wagner@wmich.edu

Darwin J. Davis and Hemant V. Kher
Department of Business Administration, College of Business and Economics, University of Delaware, Newark, DE 19716-2710, e-mail: davisd@be.udel.edu, kher@udel.edu

ABSTRACT. In this paper we extend the ELSP model to allow for linearly changing demand rates over a fixed planning horizon. This extension of the ELSP research provides a model that can be used in coordinating the production and marketing planning activities in a firm. The model allows the user to evaluate the impact of changes in product demand on production costs and customer service. We solve the model using a standard nonlinear programming package (MINOS) and show through examples based on actual production data how the model can be used to support coordinated production and marketing planning.

Subject Areas: Lot Sizing, Mathematical Programming Optimization, and Production Planning.