A multiperiod model for production planning and design in a multiproduct batch environment

Abstract

A general multiperiod model to optimize simultaneously production planning and design decisions applied to multiproduct batch plants is proposed. This model includes deterministic seasonal variations of costs, prices, demands and supplies. The overall problem is formulated as a mixed-integer linear programming model by applying appropriate linearizations of non-linear terms. The performance criterion is to maximize the net present value of the profit, which comprises sales, investment, inventories, waste disposal and resources costs, and a penalty term accounting for late deliveries. A noteworthy feature of this approach is the selection of unit dimensions from the available discrete sizes, following the usual procurement policy in this area. The model simultaneously calculates the plant structure (parallel units in every stage, and allocation of intermediate storage tanks), and unit sizes, as well as the production planning decisions in each period (stocks of both product and raw materials, production plans, policies of sales and procurement, etc.).