Multi-objective Optimization Approach as Decision Making Support for Product Mixing and Raw Material Allocation Planning

Abstract

This article is addressed to discuss a newly developed decision making support by using multi-objective optimisation approach for production planning and supplier selection problem of raw material. The problem faced is finding an optimal value for the planned production volume of each product at each time period and the raw material volume that should be purchased from each supplier for each type at each time period such that the total occurred cost is minimal and all occurred constraints are satisfied. We have solved the problem by finding the Pareto set to be the optimal solution by initially converting it into single objective optimisation by means of weighting method. From the computational simulation, the optimal decisions were obtained for all time periods which are the optimal volume of each raw material type that should be purchased from each available supplier, and the planned optimal volume of each product to be produced.