Optimal Production Planning in Two Serial Operations

This paper presents an integrated production and inventory model. ourmulti-echelon model includes the maximization of production while it minimizes thecost of production, inventory holding and setup operations. the model consists oftwo main parts , the primary and finishing operations. the primary operationcorresponds to purchasing of raw material and the finishing operation is forpreparation of finished product. demand is influenced by price elasticity and thecost of purchasing raw material is also affected by demand. the resulted model,therefore, is highly nonlinear and non-convex. geometric programming (gp) is usedto locate the global solution of the proposed model. we analyze the solution indifferent cases in order to study the behaviour of the model and for each case, anumerical examples is used to demonstrate the implementation of our analysis .