Production Planning with Inexact Customer Demand
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The vast majority of research in production planning takes demand as given and attempts to find an optimal production schedule by balancing inventory and manufacturing costs with system constraints (e.g. see [M11, V4]). Efforts to account for uncertainty in demand have primarily focused on the relationship between consumer behavior and advertising [A10, N4]. In most organizations, marketing is responsible for collecting and analyzing the relevant data. Advertising strategies are then devised and implemented through a series of allocation decisions aimed at maximizing total sales. The planning department is usually at the receiving end of these decisions and must respond with a master production schedule designed to meet customer demand at minimum cost. Experience shows that this can be a difficult and frustrating task due to the physical and operational constraints of the system. Even with such techniques as capacity requirements planning, lengthy trial and error procedures may still be needed to find good feasible solutions.
KeywordsProduction Planning Setup Cost Customer Demand Advertising Strategy Master Production Schedule
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