An Algorithm Based on Theory of Constraints and Branch and Bound for Solving Integrated Product-Mix-Outsourcing Problem

Subject Areas : Strategy

Esmaeil  Mehdizadeh ¹ (Islamic Azad University, Qazvin Branch)
Saeed  Jalili ² (Islamic Azad University, Qazvin Branch)

Received: 2016-10-09 Accepted : 2018-06-25 Published : 2019-03-01

Keywords: Theory of Constraints, outsourcing, Product-mix, Branch and bound algorithm,

Abstract :

One of the most important decision making problems in many production systems is identification and determination of products and their quantities according to available resources. This problem is called product-mix. However, in the real-world situations, for existing constrained resources, many companies try to provide some products from external resources to achieve more profits. In this paper, an integrated product-mix-outsourcing problem (IPMO) is considered to answer how many products should be produced inside of the system or purchased from external resources. For this purpose, an algorithm based on Theory of Constraints (TOC) and Branch and Bound (B&B) algorithm is proposed. For investigation of the proposed algorithm, a numerical example is presented. The obtained results show the optimal result by the new algorithm is as same as the results of integer linear programming.

References:

Aryanezhad, M., & Komijan*, A. (2004). An improved algorithm for optimizing product mix under the theory of constraints. International Journal of Production Research, 42(20), 4221-4233.

Azadegan, A., Porobic, L., Ghazinoory, S., Samouei, P., & Kheirkhah, A. S. (2011). Fuzzy logic in manufacturing: A review of literature and a specialized application. International Journal of Production Economics, 132(2), 258-270.

Chaharsooghi, S. K., & Jafari, N. (2007). A Simulated Annealing Approach for Product Mix Decisions. Scientia Iranica, 143(3), 230-235.

Coman, A., & Ronen, B. (2000). Production outsourcing: a linear programming model for the theory-of-constraints. International Journal of Production Research, 38(7), 1631-1639.

Fredendall, L. D., & Lea, B. (1997). Improving the product mix heuristic in the theory of constraints. International Journal of Production Research, 35(6), 1535-1544.

GHAZINOORI, S. S., Sadeghian, R., & Samouei, P. (2010). COMPARING OF UTILIZING “THEORY OF CONSTRAINTS’VERSUS FUZZY LINEAR PROGRAMMING IN FUZZY PRODUCT-MIX PROBLEMS.

Ghazinoory, S., Fattahi, P., & Samouei, P. (2013). A hybrid FRTOC-SA algorithm for product mix problems with fuzzy processing time and capacity. The International Journal of Advanced Manufacturing Technology, 65(9-12), 1363-1370.

Goldratt, E. M. (1988). Computerized shop floor scheduling. The International Journal of Production Research, 26(3), 443-455.

Hamidi, N., Samouei, P., & Eghbali, M. (2012). Proposed fuzzy revised theory of constraints algorithm for product mix problems with fuzzy capacity, profit and processing times. International Journal of Industrial Engineering, 22(4), 359-368.

Küttner, R. (2004). Optimal planning of product mix for subcontracting companies. Paper presented at the Proc. 4th International DAAAM Conference “Industrial Engineering.

Lee, T. N., & Plenert, G. (1993). Optimizing theory of constraints when new product alternatives exist. Production and Inventory Management Journal, 34(3), 51.

Mishara, N., Prakash, Tiwari, M. K., Shankar, R., & Chan, F. T. S. (2005). Hybrid Tabu-Simulated Annealing Based Approach to Solve Multi-Constraint Product-Mix Decision Problem. Expert Systems with Application, 29(2), 446-454.

Nazari-Shirkouhi, S., Eivazy, H., Ghodsi, R., Rezaie, K., & Atashpaz-Gargari, E. (2010). Solving the integrated product mix-outsourcing problem using the imperialist competitive algorithm. Expert Systems with Applications, 37(12), 7615-7626.

Onwublu, G. C. (2001). Tabu Search-Based Algorithm for the TOC Product-Mix Decision. International Journal of Production Research, 39(10), 2065-2067.

Onwubolu, G. C., & Mutingi, M. (2001). Optimizing the multiple constrained resources product mix problem using genetic algorithms. International Journal of Production Research, 39(9), 1897-1910.

Plenert, G. (1993). Optimizing theory of constraints when multiple constrained resources exist. European Journal of Operational Research, 70(1), 126-133.

Wang, J., Sun, S., Si, S., & Yang, H. (2009). Theory of constraints product mix optimisation based on immune algorithm. International Journal of Production Research, 47(16), 4521-4543.