Development of an Aggregate Production Planning Model : Linear Programming Approach

Abstract

An aggregate production planning (APP) problem is a real world production problem. This paper proposes an aggregate production planning model with considering backorders. Since setup costs were ignored and all other cost functions were assumed to be linear, the APP problem was formulated as a linear program with the objective of minimizing total production costs, inventory, labor (i.e., regular and overtime), and stockout costs. Given the aggregate forecasts, the APP problem was solved by the CPLEX/MPL software on windows.