Optimal Pricing and Production Master Planning in a Multiperiod Horizon Considering Capacity and Inventory Constraints

Abstract EN

We formulate and solve a single-item joint pricing and master planning optimization problem with capacity and inventory constrains.

The objective is to maximize profits over a discrete-time multiperiod horizon.

The solution process consists of two steps.

First, we solve the single-period problem exactly.

Second, using the exact solution of the single-period problem, we solve the multiperiod problem using a dynamic programming approach.

The solution process and the importance of considering both capacity and inventory constraints are illustrated with numerical examples.