Approach for integrated product variant allocation and configuration adaption of global production networks featuring post-optimality analysis

Abstract

Given today’s demand shift for product variants triggered by different market segments, manufacturing companies are facing high degrees of complexity, when utilising their global production networks. To remain competitive, companies need to prepare proactively for increasing demand dynamics by using the adaptability of their production network and planning their product allocation to production network entities comprehensively. In this paper, a mixed-integer linear programme (MILP) is proposed for the integrated product variant allocation and configuration adaption of global production networks. Further improvement potential for the optimal solution is identified and evaluated by means of post-optimality analysis, i.e. an analysis of shadow prices and slack variables is conducted. This approach contributes towards decision-making in the context of strategic production network design. Its application may reduce the risk of disadvantages decisions and supports the identification of further improvement measures in complex decision-making problems while improving decision transparency. The approach is applied at a global production network for final assembly in the aeronautics industry.