Energy-aware production planning models for emerging economies

Abstract

Manufacturing plays a vital role in fostering economic growth, yet it is one of the major consumers of energy. Considering energy consumption when devising an Aggregate Production Plan (APP) is a determinant of a more energy-efficient production schedule at the operational level. Manufacturers in emerging economies envisage planning challenges when energy reforms are introduced. A guide for analysis and decision-making in the transitional phase of phasing out energy subsidies is essential. This work tackles this problem by developing two mixed-integer linear programming models for energy-aware production planning. The first model targets maximising profit while explicitly using the energy cost as one of the cost elements. The second is an energy-driven model to minimise energy consumption while including profit as a constraint. The proposed models were validated via a real-life dataset. The models provide the decision-makers with the flexibility to improve their production plans’ energy efficiency by either developing plans that reduce energy consumption without sacrificing profit or developing production plans that increase profit without increasing energy consumption. The results imply that adopting Energy-Efficient Production Planning (EEPP) is substantial with high subsidy levels. For low subsidy levels, strategic decision-making entailing the deployment of technological solutions is more efficient.