Integrated Aggregate Production and Marketing Promotion Planning under Uncertainty: A Case Study

Abstract

This paper provides a general model that optimizes the aggregate production plan and marketing promotion plan simultaneously. There are three types of marketing promotions under consideration which are temporary discount, temporary volume increment, and offering premium gift when some units are bought. The aggregate production plan mainly considers number of workers, overtime, and inventory level in each period. Two main sources of uncertainty, namely, demand and effects of promotions are considered. They are handled by triangular fuzzy numbers, which represent pessimistic, most-likely, and optimistic situations. The optimization model is a fuzzy multi-objective linear programming model. A case study in a real company is used to illustrate the effectiveness of the model. The results show that the model can find a good compromised solution that simultaneously maximize the profits under pessimistic, most-likely, and optimistic situations