Updated on March 19, 2020

Case Study: Production Planning

Prakash Kotecha, Associate Professor
Debasis Maharana, Teaching Assistant &
Remya Kommadath, Teaching Assistant
Indian Institute of Technology Guwahati
Case study: [Link]
Implementation on MATLAB: [Link]
Constraint handling using correction approach: [Link]
Single-Level Production Planning in Petrochemical Industries Using Novel Computational Intelligence Algorithms
MILP formulation of Production Planning Problem: [Link]
Additional resources: [Link]/sksopti, [Link]/sksoptivid
Production Planning: Problem Definition
K type of raw materials, J processes, T different products.
Process 1
Raw material Product 1 A product can be produced by more than one process.
1 l11, V11, C11 l21, V21, C21 l31, V31, C31 l51, V51, C51
Level11
Level Level22
Level Level
Level 33 Level
Level65

Production cost and investment

Raw material
Process 2
Product 2 costs are known at different
2
l12, 2
V1 , C12
2
l2 , V22, C2 2
production capacity levels.
Level 1 Level 2

Process 3 Cost between successive known

Raw material
3 l13, V13, C13 l23, V23, C23 l33, V33, C33
levels are a linear function of
Level 1 Level 2 Level 3
Product 3 the quantity that is produced.

Process 4
Raw material
4
• If produced, production below the minimum level or greater than the
l14, V14, C14 l24, V24, C24 l94, V94, C94
Level 1 Level 2 Level 9 maximum level is NOT possible.
• Limited amount of budget is available.
• Limited amount of raw materials are available.
• Not all products need to be produced.
Process J
Raw material
K
T
l1j, V1j, C1j l2j, V2j, C2j l3j, V3j, C3j lLj, VLj, CLj
Product I • Maximize the profit (diff. b/w total selling price and production costs)
Level 1 Level 2 Level 3 Level L

Engineering Optimization, 2002, 34(6), 671–687 PK_DM_RK_IIT Guwahati 2

Case Study: Production Planning Industry
Sale Price Capacity Production cost Investment cost Raw material required
(monetary unit/ Product Process (units of product/yr) (monetary unit/yr) (monetary unit) (per unit of product)
unit of product) lj mj hj clj cmj chj ilj imj ihj rm1 rm2 rm3
P1 70 135 270 50.7 90.1 170.7 55 81.1 131.6 0.948 0 0
0.975 T1 P2 75 150 300 56.8 103.8 196.2 58 85.1 132.4 0.9432 0 0
P3 77.5 155 310 56.9 103.7 195.7 60.2 86.8 134.1 0.949 0 0
P4 70 145 290 51.7 97.6 184.8 55.1 83.1 132 0.9546 0 0
0.975 T2
P5 47.5 95 190 38.2 69.8 130.4 43.3 66.8 104.3 0.955 0 0
P6 40 80 160 38.5 65.2 120.7 66.2 92.8 153.2 1.045 0 0
0.780 T3
P7 40 80 160 31.8 57.1 105.5 40 61.4 95.1 1.05 0 0
0.735 T4 P8 45 90 180 37.8 57.7 94.9 106.6 151.7 231.5 0.5103 0 0
1.450 T5 P9 40 80 160 38.5 65.6 119.1 82.8 125.4 207 0.6289 0 0
P10 90 180 360 92.2 159.2 290.9 233.5 390.7 698.7 0.8648 0 0
P11 90 180 360 86.7 154.1 287.7 185.8 304.5 537.1 0.9546 0 0
P12 90 180 360 95.8 175 330.9 119 179.4 289.2 0.8265 0 0
1.130 T6
P13 90 180 360 87.5 157.2 294.9 212.3 362.7 657.7 0.7875 0 0
P14 90 180 360 105.9 196.6 375.2 109.8 164.3 263.1 0.8101 0 0
P15 90 180 360 93.1 131.1 239.4 221.7 376.1 672.7 0.8782 0 0
P16 50 100 200 41.4 68.7 117.2 115.5 180.4 287.4 0.815 0 0
0.830 T7
P17 50 100 200 34.9 62 111.6 63.7 100.2 156.3 0.6994 0 0
0.450 T8 P18 60 120 240 36.6 62.1 120.8 23.1 33.2 50.7 0.3784 0 0

Engineering Optimization, 2002, 34(6), 671–687 PK_DM_RK_IIT Guwahati 3

Case Study: Production Planning Industry
Sale Price Capacity Production cost Investment cost Raw material required
(monetary unit/ Product Process (units of product/yr) (monetary unit/yr) (monetary unit) (per unit of product)
unit of product) lj mj hj clj cmj chj ilj imj ihj rm1 rm2 rm3
P19 100 200 400 67.6 125.2 237.2 117.6 186 307.5 0 0 0
0.74 T9
P20 50 100 300 33 63.1 163.8 62.5 114 209.6 0 0 0
P21 25 50 100 28.7 48.3 86 73.1 101.1 148 0 0 0
1.25 T10
P22 25 50 100 24 43.1 79.5 46.5 70.7 110.1 0 0 0
P23 125 250 500 63.8 123.5 241 49.2 74.4 112.8 0 0 0
0.43 T11 P24 125 250 500 68.5 134.5 264 79.1 144.2 258.1 0 0 0
P25 250 500 1000 101.5 195 377 134 229.9 392.2 0 0.4678 0
0.6 T12 P26 90 180 360 50.3 90 165.6 142.6 234.8 397.5 0 0.7267 0
0.69 T13 P27 67.5 135 200 53.9 101.2 146.4 82.7 133.6 181.3 0 0.393 0
P28 70 135 270 42.1 75.1 141.8 56.9 84.5 131.5 0 1.02 0
0.86 T14 P29 70 135 270 44.6 77.5 147.7 63.4 84.5 136.9 0 1.02 0
P30 70 135 270 44.6 78.8 148 66.5 96.2 147.7 0 1.02 0
P31 100 200 400 55.7 106.8 208.4 51.4 83 144.5 0 0.9461 0
0.9 T15 P32 75 150 300 48.3 90.2 172.8 46.9 66 98.6 0 0.9387 0
P33 122.5 245 490 92 174 336.2 82.4 116.6 175.6 0 0.943 0
0.87 T16 P34 50 100 200 34.9 63.9 120.4 72 117.7 199.7 0 1.06 0
P35 182.5 365 540 63.2 111.4 156.6 125.6 195.9 259.6 0 0 0
0.48 T17 P36 182.5 365 540 60.3 103 142.6 116.4 168.2 213.5 0 0 0
P37 180 360 550 64.7 110.2 154.6 133.2 196.3 248.9 0 0 0
Engineering Optimization, 2002, 34(6), 671–687 PK_DM_RK_IIT Guwahati 4
Case Study: Production Planning Industry
Sale Price Capacity Production cost Investment cost Raw material required
(monetary unit/ Product Process (units of product/yr) (monetary unit/yr) (monetary unit) (per unit of product)
unit of product) lj mj hj clj cmj chj ilj imj ihj rm1 rm2 rm3
P38 300 430 590 48.3 65 85 210.9 278.2 356 0 0 6.35
0.16 T18 P39 300 430 590 52.8 71.4 92.7 243.5 322.4 412.6 0 0 5.928
P40 105 170 340 19.4 27.4 47.3 87 119.5 196.7 0 0 6.678
P41 15 25 50 6.6 9.7 17.7 15.3 20.2 32.7 0 0 0
0.5 T19
P42 15 25 50 6.9 10.6 19.4 17.9 26.2 44.9 0 0 0
P43 415 830 1660 55.2 96.3 184.3 224.6 365.5 682.1 0 0 7.867
0.15 T20 P44 415 830 1660 56.5 100.5 194.3 228.5 384.6 727.6 0 0 7.778
P45 415 830 1660 51.9 98 187.6 199.1 371.5 702.9 0 0 7.661
P46 225 450 680 105.8 204.8 306 116.9 190 265.1 0 0.2891 0
P47 225 450 680 108 209.7 313.5 115.6 191.8 266.8 0 0.2878 0
0.76 T21
P48 225 450 680 105.6 202.5 302.6 125.2 192.7 269 0 0.2843 0
P49 225 450 680 106.7 206.1 308.1 125.2 202 285.5 0 0.2874 0
P50 12.5 25 50 9.4 16.4 28.4 26 40.8 63.9 0 0 0
0.7 T22
P51 12.5 25 50 9 15.4 27.3 27.7 39.6 56.9 0 0 0
0.735 T23 P52 45 90 180 36.8 64 118.7 108.8 157.2 251.6 0 0 0
P53 125 250 500 81.4 145.8 275.5 208.1 308.6 515.5 0 0 0
0.68 T24
P54 125 250 500 78.4 145 277 170.5 267.3 452.7 0 0 0

Engineering Optimization, 2002, 34(6), 671–687 PK_DM_RK_IIT Guwahati 5

Decisions
 Products that need to be produced

 Processes to be used for producing selected products

 Amount of production from the processes that have been selected for producing
a particular product

Engineering Optimization, 2002, 34(6), 671–687 PK_DM_RK_IIT Guwahati 6

Selection of Decision Variables: Approach 1
X

Product Process Production quantity

T1 T2 T3 P1 P2 … P6 x1 x2 … x6
Binary variables Binary variables Continuous variables: 0 ≤ x(j) ≤ h(j)
l(j) ≤ xj ≤ h (j)

Products Process Production quantity

Production
1 1 0 1 0 1 1 1 0 6 0 10 5 20 0 Product Process level
l m h
T1 T2 T3 P1 P2 P3 P4 P5 P6 x1 x2 x3 x4 x5 x6
P1 5 10 20
T1
P2 8 13 22
P3 4 9 20
Consistent T2 P4 2 7 20
P5 10 15 25
T3 P6 3 8 20

PK_DM_RK_IIT Guwahati 7
Selection of Decision Variables: Approach 1
X

Product Process Production quantity

T1 T2 T3 P1 P2 … P6 x1 x2 … x6
Binary variables Binary variables Continuous variables: 0 ≤ x(j) ≤ h(j)

Products Process Production quantity

Production
1 1 0 1 0 1 1 1 0 6 0 10 5 20 0 Product Process level
l m h
T1 T2 T3 P1 P2 P3 P4 P5 P6 x1 x2 x3 x4 x5 x6
P1 5 10 20
T1
P2 8 13 22
T1 and T2 P1, P3, P4 and P5 are used Quantity produced
P3 4 9 20
produced
T2 P4 2 7 20
T1 T2
P5 10 15 25
Consistent P1 P3 P4 P5
T3 P6 3 8 20
6 10 5 20

PK_DM_RK_IIT Guwahati 8
Selection of Decision Variables: Approach 1
X

Product Process Production quantity

T1 T2 T3 P1 P2 … P6 x1 x2 … x6
Binary variables Binary variables Continuous variables: 0 ≤ x(j) ≤ h(j)

Products Process Production quantity

Production
1 0 1 1 0 0 1 0 0 6 8 10 5 20 10 Product Process level
l m h
T1 T2 T3 P1 P2 P3 P4 P5 P6 x1 x2 x3 x4 x5 x6
P1 5 10 20
T1
P2 8 13 22
Process P2 not used Process P2 produces 8 units P3 4 9 20
T2 P4 2 7 20
Inconsistent P5 10 15 25
T3 P6 3 8 20

PK_DM_RK_IIT Guwahati 9
Selection of Decision Variables: Approach 1
X

Product Process Production quantity

T1 T2 T3 P1 P2 … P6 x1 x2 … x6
Binary variables Binary variables Continuous variables: 0 ≤ x(j) ≤ h(j)

Products Process Production quantity

Production
1 0 1 1 0 0 1 0 0 6 8 10 5 20 10 Product Process level
l m h
T1 T2 T3 P1 P2 P3 P4 P5 P6 x1 x2 x3 x4 x5 x6
P1 5 10 20
T1
P2 8 13 22
T2 is not produced P4 for T2 is active 35 units of T2 is produced P3 4 9 20
using P3, P4 and P5
T2 P4 2 7 20
Inconsistent P5 10 15 25
T3 P6 3 8 20

PK_DM_RK_IIT Guwahati 10
Selection of Decision Variables: Approach 2
X

Product Process Production quantity

T1 T2 T3 P1 P2 … P6 x1 x2 … x6
Binary variables Binary variables Continuous variables: 0 ≤ x(j) ≤ h(j)

Products Process Production quantity

Production
1 0 1 1 0 0 1 0 0 6 8 10 5 20 10 Product Process level
l m h
T1 T2 T3 P1 P2 P3 P4 P5 P6 x1 x2 x3 x4 x5 x6
P1 5 10 20
T1
P2 8 13 22
T3 is produced P6 for T3 is inactive 10 units of T3 P3 4 9 20
is produced
T2 P4 2 7 20
Inconsistent P5 10 15 25
T3 P6 3 8 20

PK_DM_RK_IIT Guwahati 11
Selection of Decision Variables: Approach 2
X

x1 x2 x3 x4 x5 ……… xJ

Amount of product Amount of product Amount of product

produced by process 1 produced by process 5 produced by process J

Domain of decision variables: 0  x j  h j j  1, 2,..., J J is the total number of processes

Production
Product Process level
X 12 9 5 18 14 7 l m h
P1 5 10 20
T1
Product Process used Total amount P2 8 13 22
P3 4 9 20
T1 P1, P2 x1 + x2 = 12 + 9 = 21
T2 P4 2 7 20
T2 P3, P4, P5 x3 + x4 +x5 = 5 + 18 + 14 = 37
P5 10 15 25
T3 P6 x6 = 7 T3 P6 3 8 20

PK_DM_RK_IIT Guwahati 12
Cost determination
y  y1 x  x1

y2  y1 x2  x1
y2  y1
y  y1   x  x1 
x2  x1

Production cost between lower and medium level

xX
cm  cl
A x1  l , x2  m c  cl   X l
ml
y1  cl , y2  cm

Production cost between medium and high level

xX
ch  cm
B x1  m, x2  h c  cm   X  m
hm
y1  cm, y2  ch

PK_DM_RK_IIT Guwahati 13
Cost determination
y  y1 x  x1

y2  y1 x2  x1
y2  y1
y  y1   x  x1 
x2  x1

Production cost between lower and medium level Investment cost between lower and medium level
xX xX
cm  cl im  il
A x1  l , x2  m PC  cl   X l C x1  l , x2  m IC  il   X l
ml ml
y1  cl , y2  cm y1  il , y2  im

Production cost between medium and high level Investment cost between medium and high level
xX xX
ch  cm ih  im
B x1  m, x2  h PC  cm   X  m D x1  m, x2  h IC  im   X  m
hm hm
y1  cm, y2  ch y1  im, y2  ih

PK_DM_RK_IIT Guwahati 14
Cost determination
Production cost between lower and medium level Investment cost between lower and medium level
xX xX
cm  cl im  il
x1  l , x2  m PC  cl   X l x1  l , x2  m IC  il   X l
ml ml
y1  il , y2  im
One process

y1  cl , y2  cm

Production cost between medium and high level Investment cost between medium and high level
xX xX
ch  cm ih  im
x1  m, x2  h PC  cm   X  m x1  m, x2  h IC  im   X  m
hm hm
y1  cm, y2  ch y1  im, y2  ih

Production cost between lower and medium level Investment cost between lower and medium level
x j  X  j x  j   X  j .
cm  j   cl  j  im  j   il  j 
x1  l  j  , x2  m  j  PC  j   cl  j    X  j   l  j  x1  l ( j ), x2  m( j ) IC  j   il  j  
m j   l  j 
 X  j   l  j 
m j   l  j 
y1  cl  j  , y2  cm  j  y1  il ( j ), y2  im( j )
Process j

Production cost between medium and high level Investment cost between medium and high level

x j  X  j x j  X  j
ch  j   cm  j  ih  j   im  j 
x1  m  j  , x2  h  j  PC  j   cm  j    X  j   m  j  x1  m  j  , x2  h  j  IC  j   im  j  
h j  m j 
 X  j   m  j 
h j  m j 
y1  cm  j  , y2  ch  j  y1  im  j  , y2  ih  j 
PK_DM_RK_IIT Guwahati 15
Profit calculation
Production Production Investment Raw material
level cost cost required Selling
Products Processes
price
l m h cl cm ch il im ih rm1 rm2

X P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
6 0 10 5 20 0
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30
T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50

cm( j )  cl ( j )
Solution 6 0 10 5 20 0 Total PC ( j )  cl ( j )   X  l ( j ) .
m( j )  l ( j )
Production cost 12 0 19 16 27 0 74 20  10
Investment cost 52 0 66 64 75 0 257
PC (1)  10   6  5  12
10  5
Raw material 1 3.6 0 4 3.5 18 0 29.1 ch( j )  cm( j )
PC ( j )  cm( j )   X  m( j )  .
Raw material 2 4.8 0 6 4.5 22 0 37.3 h ( j )  m( j )
Revenue 60 0 300 150 600 0 1110 29  18
Profit 48 0 281 134 573 0 1036
PC (3)  18  10  9   19
20  9

PK_DM_RK_IIT Guwahati 16
Profit calculation
Production Production Investment Raw material
level cost cost required Selling
Products Processes
price
l m h cl cm ch il im ih rm1 rm2

X P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
6 0 10 5 20 0
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30
T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50

Solution 6 0 10 5 20 0 Total im( j )  il ( j )

IC ( j )  il ( j )   X  l ( j ) .
m( j )  l ( j )
Production cost 12 0 19 16 27 0 74
Investment cost 52 0 66 64 75 0 257 60  50
IC (1)  50   6  5  52
10  5
Raw material 1 3.6 0 4 3.5 18 0 29.1
ih( j )  im( j )
Raw material 2 4.8 0 6 4.5 22 0 37.3 IC ( j )  im( j )   X  m( j )  .
h ( j )  m( j )
Revenue 60 0 300 150 600 0 1110
Profit 48 0 281 134 573 0 1036 76  65
IC (3)  65  10  9   66
20  9
PK_DM_RK_IIT Guwahati 17
Profit calculation
Production Production Investment Raw material
level cost cost required Selling
Products Processes
price
l m h cl cm ch il im ih rm1 rm2

X P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
6 0 10 5 20 0
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30
T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50

Solution 6 0 10 5 20 0 Total X Raw material 1 used

Production cost 12 0 19 16 27 0 74 6 6 x 0.6 = 3.6
Investment cost 52 0 66 64 75 0 257 0 0
Raw material 1 3.6 0 4 3.5 18 0 29.1 10 10 x 0.4 = 4
Raw material 2 4.8 0 6 4.5 22 0 37.3 5 5 x 0.7 = 3.5
Revenue 60 0 300 150 600 0 1110 20 20 x 0.9 = 18
Profit 48 0 281 134 573 0 1036 0 0

PK_DM_RK_IIT Guwahati 18
Profit calculation
Production Production Investment Raw material
level cost cost required Selling
Products Processes
price
l m h cl cm ch il im ih rm1 rm2

X P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
6 0 10 5 20 0
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30
T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50

Solution 6 0 10 5 20 0 Total X Revenue

Production cost 12 0 19 16 27 0 74 6 6 x 10 = 60
Investment cost 52 0 66 64 75 0 257 0 0
Raw material 1 3.6 0 4 3.5 18 0 29.1 10 10 x 30 = 300
Raw material 2 4.8 0 6 4.5 22 0 37.3 5 5 x 30 = 150
Revenue 60 0 300 150 600 0 1110 20 20 x 30 = 600
Profit 48 0 281 134 573 0 1036 0 0

PK_DM_RK_IIT Guwahati 19
Profit calculation
Production Production Investment Raw material
level cost cost required Selling
Products Processes
price
l m h cl cm ch il im ih rm1 rm2

X P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
6 0 10 5 20 0
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30
T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50

Solution 6 0 10 5 20 0 Total X Profit

Production cost 12 0 19 16 27 0 74 6 60 − 12 = 48
Investment cost 52 0 66 64 75 0 257 0 0
Raw material 1 3.6 0 4 3.5 18 0 29.1 10 300 − 19 = 281
Raw material 2 4.8 0 6 4.5 22 0 37.3 5 150 − 16 = 134
Revenue 60 0 300 150 600 0 1110 20 600 − 27 = 573
Profit 48 0 281 134 573 0 1036 0 0

PK_DM_RK_IIT Guwahati 20
Domain constraint
Quantity produced by a process can be zero or should be greater than or equal to its
low level production capacity.

 10 5
if 0  X  j   l  j 
Penalty incurred for a violated variable is P domain
 j   j  1, 2,..., J
 0 if l  j   X  j   h  j 

X 12 20 5 4 18 0 Product Process l m h
P1 5 10 20
 P1 produces T1 between M and H - valid T1
 P2 produces T1 between M and H - valid P2 8 13 22
P3 4 9 20
 P3 produces T2 between L and M - valid
 P4 produces T2 between L and M - valid T2 P4 2 7 20
 P5 produces T2 between M and H - valid P5 10 15 25
 P6 has not produced T3 T3 P6 3 8 20

Values of all variable are within their domains - J

P domain
  P domain  j   0
Feasible solution with respect to the domain j 1

PK_DM_RK_IIT Guwahati 21
Domain constraint
Quantity produced by a process can be zero or should be greater than or equal to its
low level production capacity.

 10 5
if 0  X  j   l  j 
Penalty incurred for a violated variable is P domain
 j   j  1, 2,..., J
 0 if l  j   X  j   h  j 

X 4 5 2 1 5 2 Product Process l m h

 P1 produces T1 between 0 and L - not valid P1 5 10 20

T1
 P2 produces T1 between 0 and L - not valid P2 8 13 22

 P3 produces T2 between 0 and L - not valid P3 4 9 20

 P4 produces T2 between 0 and L - not valid T2 P4 2 7 20
 P5 produces T2 between 0 and L - not valid P5 10 15 25
 P6 produces T3 between 0 and L - not valid T3 P6 3 8 20
J
Values of all variables are in the invalid region – P domain
  P domain  j   6  105
Infeasible solution with respect to the domain j 1

PK_DM_RK_IIT Guwahati 22
Domain constraint
Quantity produced by a process can be zero or should be greater than or equal to its
low level production capacity.

 10 5
if 0  X  j   l  j 
Penalty incurred for a violated variable is P domain
 j   j  1, 2,..., J
 0 if l  j   X  j   h  j 

X 9 7 8 0 6 18 Product Process l m h
P1 5 10 20
 P1 produces T1 between L and M - valid T1
 P2 produces T1 between 0 and L - not valid P2 8 13 22
P3 4 9 20
 P3 produces T2 between L and M - valid
 P4 is not produced T2 T2 P4 2 7 20
 P5 produces T2 between 0 and L - not valid P5 10 15 25
 P6 produces T3 between L and M - valid T3 P6 3 8 20
J
Values of some variables are in the invalid region – P domain
  P domain  j   2  105
Infeasible solution with respect to the domain j 1

PK_DM_RK_IIT Guwahati 23
Production cost
Production cost of jth process can be determined as

 cm  j   cl  j 
 cl  j  
m j   l  j 
 X  j   l  j   if l  j   X  j   m  j 

PC  j    j  1,2,..., J
cm  j    
ch j  cm   X j  m j if m j  X j  h j
j
          

 h  j   m  j 

Permissible production for each process is known.

J Total number of processes
Production cost cannot be determined if X(j) Quantity produced by jth process
production not in the permissible range. cl(j) Production cost of jth process at level l
cm(j) Production cost of jth process at level m
ch(j) Production cost of jth process at level h
l(j) Low level production capacity of jth process
m(j) Medium level production capacity of jth process
h(j) High level production capacity of jth process
PK_DM_RK_IIT Guwahati 24
Production cost
Let the solution be Product Process l m h cl cm ch
P1 5 10 20 50 60 70
X 9 7 8 15 6 18 T1
P2 8 13 22 52 62 71
P3 4 9 20 55 65 76
Values of some variables are in the invalid region – T2 P4 2 7 20 58 68 81
Infeasible solution with respect to the domain
P5 10 15 25 60 70 80
T3 P6 3 8 20 54 64 76
Production cost of variables violating their domains
cannot be calculated.

18 - 16 28 - 35

 cm  j   cl  j 
cl  j    X  j   l  j   if l  j   X  j   m  j 
Total production cost = 18 + 16 + 28 + 35 = 97 
PC  j   
m j  l  j
cm  j   ch  j   cm  j  X  j   m  j  if m  j   X  j   h  j 
 h j  m j
 

j  1, 2,..., J

PK_DM_RK_IIT Guwahati 25
Production cost
Let the solution be Product Process l m h cl cm ch
P1 5 10 20 50 60 70
X 4 5 2 1 5 2 T1
P2 8 13 22 52 62 71
P3 4 9 20 55 65 76
Values of all variables are in the invalid region -
T2 P4 2 7 20 58 68 81
Infeasible solution with respect to the domain
P5 10 15 25 60 70 80
T3 P6 3 8 20 54 64 76
Production cost cannot be calculated.

 cm  j   cl  j 
cl  j  
m j  l  j
 X  j   l  j   if l  j   X  j   m  j 

PC  j   
cm  j   ch  j   cm  j  X  j   m  j  if m  j   X  j   h  j 
 h j  m j
 

j  1, 2,..., J

PK_DM_RK_IIT Guwahati 26
Investment cost and budget
Investment cost of jth process can be determined as
  im  j   il  j  
il  j      X  j   l  j  if l  j   X  j   m  j 
  m  j   l  j  
IC  j    j  1,2,..., J
  ih  j   im  j  
im  j    h  j   m  j    X  j   m  j   if m  j   X  j   h  j 
  

Investment cost of the entire production plan should not exceed the available budget.
J Total number of processes
Violation incurs penalty ( PI )
X(j) Quantity produced by jth process
il(j) Investment cost of jth process at level l
 J 
2
J
 B   IC  j   if  IC  j   B im(j) Investment cost of jth process at level m
P  
I
 Investment cost of jth process at level h
j 1 j 1 ih(j)

0 otherwise l(j) Low level production capacity of jth process
m(j) Medium level production capacity of jth process
h(j) High level production capacity of jth process

PK_DM_RK_IIT Guwahati
B Budget available 27
Investment cost and budget
Let the available budget be 400 monetary units Product Process l m h il im ih
P1 5 10 20 50 60 70
X 12 20 5 4 18 0 T1
P2 8 13 22 52 62 71
Values of all variables are within their domains - P3 4 9 20 55 65 76
Feasible solution with respect to the domain T2 P4 2 7 20 58 68 81
Investment cost corresponding to each process is as P5 10 15 25 60 70 80
T3 P6 3 8 20 54 64 76
62 69 57 62 73 0
  im  j   il  j  
Total investment cost = 323 il  j   
  m  j   l  j 
  X  j   l  j  

if l  j   X  j   m  j 
IC  j   
  ih  j   im  j  
im  j      X  j   m  j   if m  j   X  j   h  j 
Total investment cost < Available budget   h  j   m  j  
Feasible solution with respect to the budget constraint j  1, 2,..., J

 J 
2
J

PI  0  B   IC  j   if  IC  j   B
P I   j 1  j 1

0 otherwise

PK_DM_RK_IIT Guwahati 28
Investment cost and budget
Let the available budget be 400 monetary units Product Process l m h il im ih
P1 5 10 20 50 60 70
X 20 21 20 19 23 20 T1
P2 8 13 22 52 62 71
Values of all variables are within their domains - P3 4 9 20 55 65 76
Feasible solution with respect to the domain T2 P4 2 7 20 58 68 81
Investment cost to each process is as P5 10 15 25 60 70 80
T3 P6 3 8 20 54 64 76
70 70 76 80 78 76

  im  j   il  j  
Total investment cost = 450 il  j   
  m  j   l  j 
  X  j   l  j  

if l  j   X  j   m  j 
IC  j   
  ih  j   im  j  
im  j      X  j   m  j   if m  j   X  j   h  j 
Total investment cost > Available budget   h  j   m  j  
j  1, 2,..., J
Infeasible solution with respect to the budget constraint
 J 
2
J

P I   400  450   2500  B   IC  j   if  IC  j   B

P I  
2

j 1  j 1

0 otherwise

PK_DM_RK_IIT Guwahati 29
Investment cost and budget
Let the available budget be 400 monetary units Product Process l m h il im ih
P1 5 10 20 50 60 70
X 4 5 2 1 5 2 T1
P2 8 13 22 52 62 71
P3 4 9 20 55 65 76
Values of all variables are in invalid region - T2 P4 2 7 20 58 68 81
Infeasible solution with respect to the domain P5 10 15 25 60 70 80
T3 P6 3 8 20 54 64 76
Investment cost cannot be calculated.
  im  j   il  j  
il  j      X  j   l  j   if l  j   X  j   m  j 
  m  j   l  j  
IC  j   
  ih  j   im  j  
im  j      X  j   m  j   if m  j   X  j   h  j 
  h  j   m  j  
j  1, 2,..., J

 J 
2
J
 B   IC  j   if  IC  j   B
P I   j 1  j 1

0 otherwise

PK_DM_RK_IIT Guwahati 30
Investment cost and budget
Let the available budget be 400 monetary units Product Process l m h il im ih
P1 5 10 20 50 60 70
X 9 7 8 15 6 18 T1
P2 8 13 22 52 62 71
Values of some variables are in the invalid region - P3 4 9 20 55 65 76
Infeasible solution with respect to the domain T2 P4 2 7 20 58 68 81
Investment cost for domain violating variables P5 10 15 25 60 70 80
is not calculated. T3 P6 3 8 20 54 64 76

58 - 63 76 - 74
  im  j   il  j  
il  j      X  j   l  j   if l  j   X  j   m  j 
  m  j   l  j  
Total investment cost = 58 + 63 + 76 + 74 = 271 IC  j   
  ih  j   im  j  
im  j      X  j   m  j   if m  j   X  j   h  j 
  h  j   m  j  
Total investment cost < Available budget j  1, 2,..., J
Feasible solution with respect to the budget constraint
 J 
2
J
 B   IC  j   if  IC  j   B
P I  
PI  0 
j 1  j 1

0 otherwise

PK_DM_RK_IIT Guwahati 31
Raw material
Let the available raw material be 120 units Product Process l m h
Raw material
required (rm)
X 12 20 5 4 18 0 P1 5 10 20 2
T1
P2 8 13 22 1.3
Values of all variables are within their domains -
Feasible solution with respect to the domain P3 4 9 20 0.8
T2 P4 2 7 20 1.5
Amount of raw material required for each process is
P5 10 15 25 2.5

24 26 4 6 45 0 T3 P6 3 8 20 1

Total raw material required = 105

Total raw material required < Available raw material
Feasible solution with respect to the raw material constraint
 J 
2
J
 R  k    rm  j  X  j   if R  k    rm  j  X  j 

PR  0 P  k   
R j 1  j 1
k  1, 2,..., K
 J

0 if R  k    rm  j  X  j 
 j 1

PK_DM_RK_IIT Guwahati 32
Raw material
Let the available raw material be 120 units Product Process l m h
Raw material
required (rm)
X 20 10 20 16 24 20 P1 5 10 20 2
T1
P2 8 13 22 1.3
Values of all variables are within their domains -
Feasible solution with respect to the domain P3 4 9 20 0.8
T2 P4 2 7 20 1.5
Amount of raw material required for each process is
P5 10 15 25 2.5

40 13 16 24 60 20 T3 P6 3 8 20 1

Total raw material required = 173

 J 
2
J
 R  k    rm  j  X  j   if R  k    rm  j  X  j 
Total raw material required > Available raw material 
P  k   
R j 1  j 1

Infeasible solution with respect to the raw material constraint  J

0 if R  k    rm  j  X  j 
 j 1

k  1, 2,..., K
P I  120  173  2809
2

PK_DM_RK_IIT Guwahati 33
Raw material
Let the available raw material be 120 units Product Process l m h
Raw material
required (rm)

X 4 5 2 1 5 2 P1 5 10 20 2
T1
P2 8 13 22 1.3
P3 4 9 20 0.8
Values of all variables are in the invalid region
Infeasible solution with respect to the domain T2 P4 2 7 20 1.5
P5 10 15 25 2.5
Amount of raw material required cannot be calculated. T3 P6 3 8 20 1

 J 
2
J
 R  k    rm  j  X  j   if R  k    rm  j  X  j 

P  k   
R j 1  j 1

 J

0 if R  k    rm  j  X  j 
 j 1

k  1, 2,..., K

PK_DM_RK_IIT Guwahati 34
Raw material
Let the available raw material be 120 units Product Process l m h
Raw material
required (rm)
X 9 7 10 18 6 18 P1 5 10 20 2
T1
P2 8 13 22 1.3
Values of some variables are in the invalid region -
P3 4 9 20 0.8
Infeasible solution with respect to the domain
T2 P4 2 7 20 1.5
Raw material required for the domain violating
P5 10 15 25 2.5
variables is not calculated.
T3 P6 3 8 20 1
18 - 8 27 - 18

Total raw material required = 18 + 8 + 27 + 18 = 71  2

J  J
 R  k    rm  j  X  j   if R  k    rm  j  X  j 

P  k   
R j 1  j 1

 J

0 if R  k    rm  j  X  j 
Total raw material required < Available raw material  j 1

Feasible solution with respect to the raw material constraint k  1, 2,..., K

PR  0

PK_DM_RK_IIT Guwahati 35
Determination of Profit
Profit calculation
SP(j): Selling price for product produced using jth process
J PC(j): Production cost for product produced using jth process
Profit    SP  j  X  j   PC  j   X(j): Quantity of product produced from jth process
j 1
X
6 4 10 5 20 0

Raw material
X Production cost Revenue Profit Products Processes
Production level Production cost Investment cost
required Selling
price
60 48 l m h cl cm ch il im ih rm1 rm2
6 12
P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
4 - - - T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
10 19 300 281 P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30

5 16 150 134 T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30

P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
20 27 600 573
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50
0 0 0 0

Total Profit = 1036

PK_DM_RK_IIT Guwahati 36
Determination of fitness function value
SP(j): Selling price for product produced using jth process
 J   K
 
P      P domain  j      P R  k     P I   PC(j): Production cost for product produced using jth process
 j 1 
   k 1  
X(j): Quantity of product produced from jth process
f  Profit    P  f   Profit    P 
Raw material
Production level Production cost Investment cost
Maximization Minimization Products Processes required Selling
price
l m h cl cm ch il im ih rm1 rm2

X Penalty Penalty P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10

Domain T1
Budget Raw Material Profit P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10
constraint
violation violation
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30
20 0 170 T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
21 0 180 P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
2 105 0 T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50
5476 506.25 0
19 0 538
23 0 660
20 0 963
X 20 21 2 19 23 20 Total Available
P = 1015 (105 + 5476 + 506.25 + 0) IC 70 70 0 80 78 76 374 300
f = −2511 + 1015 (105 + 5476 + 506.25 + 0) λ = 1015 rm1 12 10.5 0 13.3 20.7 16 72.5 50
f = 1.06 x 1020 rm2 16 25.2 0 17.1 25.3 26 109.6 120

PK_DM_RK_IIT Guwahati 37
 Production Production Investment Raw material
level cost cost required Selling
Products Processes
price
l m h cl cm ch il im ih rm1 rm2
Available budget = 300
P1 5 10 20 10 20 30 50 60 70 0.6 0.8 10
T1
P2 8 13 22 12 22 31 52 62 71 0.5 1.2 10 Available raw material 1 = 50
P3 4 9 20 8 18 29 55 65 76 0.4 0.6 30 Available raw material 2 = 50
T2 P4 2 7 20 10 20 33 58 68 81 0.7 0.9 30
λ = 1015
P5 10 15 25 12 22 32 60 70 80 0.9 1.1 30
T3 P6 3 8 20 15 25 37 54 64 76 0.8 1.3 50

X = [6 10 5 20 0 0] X = [18 15 8 10 5 20]
Penalty Domain Hole 0 1 x 105
Penalty Investment Cost 0 1764
Penalty Raw Material 1 0 0
Penalty Raw Material 2 0 492.84
Total Penalty 0 1.02 x 106
Total Production Cost 71 128
Total Revenue 910 1870
Max. Profit (Objective 839 1742
function)
Min. Fitness –839 1.02 x 1020
PK_DM_RK_IIT Guwahati 38
Metaheuristic techniques and optimization problem

Fitness function
Solution
Solution (( XX )) Determine penalty due to the violation
in domain hole
Metaheuristic
Technique Determine penalty due to the violation
Fitness ( f ) Decision Variables (X) in raw material constraint

Optimization problem Metaheuristic Determine penalty due to the violation

Technique in budget constraint

Fitness function Problem data

Determine the profit

Determine the fitness function

Fitness
Fitness (( ff ))

PK_DM_RK_IIT Guwahati 39
Metaheuristic techniques and optimization problem
105 if 0  X j  l j
Fitness function P domain
 j   j  1,2,..., J
 0 if l j  X j  h j
Solution
Solution (( XX )) Determine penalty due to the violation  J 
2
J

in domain hole  R  k    rm  j  X  j   if R  k    rm  j  X  j 

P  k   
R j 1  j 1

 J

0 if R  k    rm  j  X  j 
Determine penalty due to the violation  j 1
in raw material constraint k  1,2,..., K
  im  j   il  j  
il  j      X  j   l  j  if l  j   X  j   m  j 
Determine penalty due to the violation   m  j   l  j  
IC  j   
Metaheuristic in budget constraint  ih  j   im  j  

Technique im  j      X  j   m  j   if m  j   X  j   h  j 
  h  j   m  j  
Determine
J
the profit j  1,2,..., J
Profit    SP  j  X  j   PC  j    J 
2
J
 B   IC  j   if  IC  j   B
P I  
j 1
j 1  j 1

0 otherwise
Determine the fitness function  cm  j   cl  j 
cl  j    X  j   l  j   if l  j   X  j   m  j 
f   Profit    P   m  j   l  j 
PC  j   
  J domain  cm  j   ch  j   cm  j  X  j   m  j  if m  j   X  j   h  j 
Fitness
Fitness (( ff ))
P   P 
  K R 
j      P k     PI    
 j 1  
 h  j   m  j 
   k 1  
j  1,2,..., J
PK_DM_RK_IIT Guwahati 40
Metaheuristic techniques and optimization problem
Algorithm parameters
Problem details X Optimization problem
Metaheuristic
Script
Technique Fitness function Problem data
Best solution f
and other results

Algorithm parameters
Problem details X Optimization problem
Metaheuristic
Script
Technique Fitness function Problem data
Best solution
and other results f c , Xc

PK_DM_RK_IIT Guwahati 41
Different correction approaches
Approach 1
0 if xi  li and xi  0
Processes P1 P2 P3 P4 P5 xi  
 xi else
Low level capacity ( l ) 5 9 1 3 4 i  1, 2,..., D
Decision variables X 12 6 2 19 2 where D is the problem dimension
Approach 1 Approach 2
Xc 12 0 2 19 0
(Fix it to zero)
li if xi  li and xi  0
Approach 2 xi  
Xc 12 9 2 19 4  xi else
(Fix it to low level)
i  1, 2,..., D
Approach 3
Xc 12 0 2 19 4 where D is the problem dimension
(Fix randomly)
Approach 3
r = 0.3 r = 0.8
0 if xi  li and xi  0 and r  0.5

xi  li if xi  li and xi  0 and r  0.5
 x else
 i
i  1,2,..., D
where D is the problem dimension
R. Kommadath, Technical report, IIT Guwahati, 2019 PK_DM_RK_IIT Guwahati 42
 MILP Formulation of
Production Planning Problem

43
Mathematical formulation
cm  cl
if X  l and X  m  PC  cl  X l
ml
ch  cm
if X  m and X  h  PC  cm   X  m
hm
PC
 X  0  l  X  h  X  0  PC  0, IC  0

44
Mathematical formulation
cm  cl
if X  l and X  m  PC  cl  X l
ml
ch  cm
if X  m and X  h  PC  cm   X  m
hm
PC
 X  0  l  X  h  X  0  PC  0, IC  0

1, X m 1, X 0
Y  Z 
0, X m 0, X 0

L Y 1
H  1 Y  2
LM H Z  3 L, M , H  
U is a large number
X  l L  mM  hH  4
PC  cl  L  cm  M  ch  H  5
X j  U Zj  6
45
Mathematical formulation
cm  cl if X  l and X  m  Y  1, Z  1
if X  l and X  m  PC  cl  X l
ml
L  M  1  M  1 L
ch  cm
if X  m and X  h  PC  cm   X  m X  l  L  m  M  X  l  L  m 1  L 
hm
PC  X m
L 
 X  0  l  X  h  X  0  PC  0, IC  0  l m 
PC  cl  L  cm  M

X
1, X m 1, X 0
Y  Z 
0, X m 0, X 0

L Y 1
H  1 Y  2  L, M , H  
LM H Z  3 U is a large number
X  l L  mM  hH  4
PC  cl  L  cm  M  ch  H  5
X j  U Zj  6

46
Mathematical formulation
cm  cl if X  l and X  m  Y  1, Z  1
if X  l and X  m  PC  cl  X l
ml
L  M  1  M  1 L
ch  cm
if X  m and X  h  PC  cm   X  m X  l  L  m  M  X  l  L  m 1  L 
hm
PC  X m
L 
 X  0  l  X  h  X  0  PC  0, IC  0  l m 
PC  cl  L  cm  M

X
1, X m 1, X 0  X m   X  m 
PC  cl     cm  1   
Y  Z   l m    l  m 
0, X m 0, X 0
 X m l X 
PC  cl     cm   
L Y 1  l m   l m 
cl  X  cm  X  cm  l  cl  m
H  1 Y  2  L, M , H   PC 
l m
LM H Z  3 U is a large number PC 
cl  X  cm  X  cm  l  cl  l  cl  l  cl  m
l m
X  l L  mM  hH  4 X   cl  cm   l   cm  cl  cl   l  m 
PC  cl  L  cm  M  ch  H  5 PC 
l m

l m
X j  U Zj  6  cm  cl 
PC      X  l   cl
 m  l 

47
Mathematical formulation
cm  cl if X  l and X  m  Y  1, Z  1
if X  l and X  m  PC  cl  X l
ml
L  M  1  M  1 L
ch  cm
if X  m and X  h  PC  cm   X  m X  l  L  m  M  X  l  L  m 1  L 
hm
PC  X m
L 
 X  0  l  X  h  X  0  PC  0, IC  0  l m 
PC  cl  L  cm  M

X X  l  L  m 1  L 
1, X m 1, X 0 X  l L  m  mL  X m   X  m 
PC  cl     cm  1   
Y  Z   l m    l  m 
0, X m 0, X 0 X  m  L l  m 
 X m l X 
PC  cl     cm   
L Y 1  l m   l m 
cl  X  cm  X  cm  l  cl  m
H  1 Y  2  L, M , H   PC 
l m
LM H Z  3 U is a large number PC 
cl  X  cm  X  cm  l  cl  l  cl  l  cl  m
l m
X  l L  mM  hH  4 X   cl  cm   l   cm  cl  cl   l  m 
PC  cl  L  cm  M  ch  H  5 PC 
l m

l m
X j  U Zj  6  cm  cl 
PC      X  l   cl
 m  l 

48
Mathematical formulation
cm  cl if X  l and X  m  Y  1, Z  1
if X  l and X  m  PC  cl  X l
ml
L  M  1  M  1 L
ch  cm
if X  m and X  h  PC  cm   X  m X  l  L  m  M  X  l  L  m 1  L 
hm
PC  X m
L 
 X  0  l  X  h  X  0  PC  0, IC  0  l m 
PC  cl  L  cm  M

X X  l  L  m 1  L 
1, X m 1, X 0 X  l L  m  mL  X m   X  m 
PC  cl     cm  1   
Y  Z   l m    l  m 
0, X m 0, X 0 X  m  L l  m 
 X m l X 
PC  cl     cm   
L Y 1  l m   l m 
cl  X  cm  X  cm  l  cl  m
H  1 Y  2  L, M , H   if X  m and X  h  Y  0, Z  1 PC 
l m
LM H Z  3 U is a large number PC  cm  M  ch  H PC 
cl  X  cm  X  cm  l  cl  l  cl  l  cl  m
l m
X  l L  mM  hH  4  cm  ch  X   cl  cm   l   cm  cl  cl   l  m 
PC  cl  L  cm  M  ch  H  5 PC      X  m   cm PC  
 m  h  l m l m
X j  U Zj  6  cm  cl 
PC      X  l   cl
 m  l 

49
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H Z  3
X  l L  mM  hH  4
X j  U Zj  5
PC  cl  L  cm  M  ch  H  6
IC  il  L  im  M  ih  H 7

50
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H 0 LM H Z  3
L, M , H  0 if Z  0 X  l L  mM  hH  4
Yes
X j  U Zj  5
PC  cl  L  cm  M  ch  H  6
IC  il  L  im  M  ih  H 7

51
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H Z  3
L, M , H  0 if Z  0 X  l L  mM  hH  4
Yes
X j  U Zj  5
PC  cl  L  cm  M  ch  H  6
X 0 IC  il  L  im  M  ih  H 7
PC  0, IC  0

52
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
L  M  H 1 LM H Z  3
L, M , H  0 if Z  0 L, M , H  0 X  l L  mM  hH  4
Yes No
X j  U Zj  5
PC  cl  L  cm  M  ch  H  6
X 0 IC  il  L  im  M  ih  H 7
PC  0, IC  0

53
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H Z  3
L, M , H  0 if Z  0 L, M , H  0
X  l L  mM  hH  4
Yes No
X j  U Zj  5
L  0, H  1
PC  cl  L  cm  M  ch  H  6
X 0 if Y  0 IC  il  L  im  M  ih  H 7
M  H 1 Yes
PC  0, IC  0

54
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H Z  3
L, M , H  0 if Z  0 L, M , H  0
X  l L  mM  hH  4
Yes No
X j  U Zj  5
L  0, H  1
PC  cl  L  cm  M  ch  H  6
X 0 if Y  0 IC  il  L  im  M  ih  H 7
M  H 1 Yes
PC  0, IC  0

X  mM  hH
PC  cm  M  ch  H
IC  im  M  ih  H

55
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H Z  3
L, M , H  0 if Z  0 L, M , H  0
X  l L  mM  hH  4
Yes No
X j  U Zj  5
L  0, H  1
PC  cl  L  cm  M  ch  H  6
X 0 if Y  0 IC  il  L  im  M  ih  H 7
M  H 1 Yes
PC  0, IC  0
No
X  mM  hH L  1, H  0
PC  cm  M  ch  H L  M 1
IC  im  M  ih  H

56
Mathematical formulation
Y , Z : Binary variables L Y 1
0  L, M , H  1 H  1 Y  2
LM H Z  3
L, M , H  0 if Z  0 L, M , H  0
X  l L  mM  hH  4
Yes No
X j  U Zj  5
L  0, H  1
PC  cl  L  cm  M  ch  H  6
X 0 if Y  0 IC  il  L  im  M  ih  H 7
M  H 1 Yes
PC  0, IC  0
No
X  mM  hH L  1, H  0
PC  cm  M  ch  H L  M 1
IC  im  M  ih  H

X  l L  mM
PC  cl  L  cm  M
IC  il  L  im  M
57
Mathematical formulation
Y , Z : Binary variables lX m
L  M  0  1  M  1 L
0  L, M , H  1 X  l  L  m  M  0  X  l  L  m  1  L 
 X m
L 
 l m 
PC  cl  L  cm  M IC  il  L  im  M

L, M , H  0 if Z  0 L, M , H  0
 X m
PC  cl  
 l  m 
  X  m 
  cm  1  
  l  m 

Yes No
 X m l X 
PC  cl     cm   
 l m   l m 
cl  X  cm  X  cm  l  cl  m
PC 
L  0, H  1 l m
X 0 if Y  0 Add and substract cl  l in numerator
M  H 1 Yes PC 
cl  X  cm  X  cm  l  cl  l  cl  l  cl  m
PC  0, IC  0 l m
X   cl  cm   l   cm  cl  cl   l  m 
No PC 
l m

l m
 cm  cl 
   X  l   cl
L Y 1 X  mM  hH L  1, H  0
PC  
 ml 

PC  cm  M  ch  H L  M 1
H  1 Y  2 m X h
PC  cm  M  ch  H IC  im  M  ih  H

IC  im  M  ih  H
LM H Z  3
X  l L  mM  hH  4 X  l L  mM
X  U Z  5 PC  cl  L  cm  M
PC  cl  L  cm  M  ch  H  6 IC  il  L  im  M
IC  il  L  im  M  ih  H 7 58
Mathematical formulation
lj  X j  mj
Y j , Z j : Binary variables
Lj  M j  0  1  M j  1 Lj
0  Lj , M j , H j  1 X j  l j  L j  m j  M j  0  X j  l j  L j  m j  1  L j 
 X j  mj 
Lj  
 l  m 
 j j 
IC j  il j  L j  im j  M j
PC j  cl j  L j  cm j  M j

Lj , M j , H j  0 if Z j  0 Lj , M j , H j  0  X j  mj
PC j  cl j  
   X j  mj
  cm j  1  

 
Yes No  l m
 j j 

  lj  mj 


 X j  mj   lj  X j 
PC j  cl j    cm j  
 l  m   l  m 
 j j   j j 

Lj , M j , H j  0 L j  0, H j  1 cl j  X j  cm j  X j  cm j  l j  cl j  m j
if Y j  0 PC j 
lj  mj
Xj 0 M j  H j 1 Yes Add and substract cl j  l j in numerator
cl j  X j  cm j  X j  cm j  l j  cl j  l j  cl j  l j  cl j  m j
PC j  0, IC j  0 PC j 
No lj  mj
X j   cl j  cm j   l j   cm j  cl j  cl j   l j  m j 
L j  Yj 1 X j  m j  M j  hj  H j L j  1, H j  0 PC j 
lj  mj

lj  mj

PC j  cm j  M j  ch j  H j Lj  M j  1  cm j  cl j 
H j  1  Yj  2 PC j  
 m l
 j j
   X j  l j   cl j

IC j  im j  M j  ih j  H j
Lj  M j  H j  Z j  3 m j  X j  hj PC j  cm j  M j  ch j  H IC j  im j  M j  ih j  H j

X j  l j  Lj  m j  M j  hj  H j  4 X j  l j L j  m j  M j PC1  cl1  L1  cm1  M 1  ch1  H1 , j 1

X j  U Zj  5 PC j  cl j  L j  cm j  M j PC j  cl j  L j  cm j  M j  ch j  H j , j  1, 2..J

PC j  cl j  L j  cm j  M j  ch j  H j  6 IC j  il j  L j  im j  M j
IC1  il1  L1  im1  M 1  ih1  H1 , j 1
IC j  il j  L j  im j  M j  ih j  H j , j  1, 2, J
IC j  il j  L j  im j  M j  ih j  H j 7
59
Mathematical formulation
J
Max profit =   SPj  X j  PC j 
j 1

PC j  cl j  L j  cm j  M j  ch j  H j j  1, 2,..., J Determining production cost

clj, cmj and chj Production cost for using process j at lj, mj and hj capacity level.
SPj Selling price of product produced from process j
Lj, Mj and Hj Portions of product produced using production levels lj, mj and hj

60
Mathematical formulation
J
Max profit =   SPj  X j  PC j 
j 1

PC j  cl j  L j  cm j  M j  ch j  H j j  1, 2,..., J Determining production cost

 IC
j 1
j B Constraints on investment cost

Determining investment cost

IC j  il j  L j  im j  M j  ih j  H j j  1, 2,..., J
J

 rm
j 1
jk  X j  Rk k  1,..., K Constraints on raw material

clj, cmj and chj Production cost for using process j at lj, mj and hj capacity level.
SPj Selling price of product produced from process j
ilj, imj and ihj Investment cost for process j at lj, mj and hj capacity level.
B Total available budget
rmjk Amount of k type raw material consumed for the production of Xj
Rk The total amount of k type raw material available in feedstock.
Lj, Mj and Hj Portions of product produced using production levels lj, mj and hj

61
Mathematical formulation
J
Max profit =   SPj  X j  PC j 
j 1

PC j  cl j  L j  cm j  M j  ch j  H j j  1, 2,..., J Determining production cost

 IC
j 1
j B Constraints on investment cost

Determining investment cost

IC j  il j  L j  im j  M j  ih j  H j j  1, 2,..., J
J

 rm
j 1
jk  X j  Rk k  1,..., K Constraints on raw material

clj, cmj and chj Production cost for using process j at lj, mj and hj capacity level.
Lj  Yj j  1, 2,..., J
SPj Selling price of product produced from process j
H j  1  Yj j  1, 2,..., J
ilj, imj and ihj Investment cost for process j at lj, mj and hj capacity level.
Lj  M j  H j  Z j j  1, 2,..., J B Total available budget
X j  l j  L j  m j  M j  h j  H j j  1, 2,..., J rmjk Amount of k type raw material consumed for the production of Xj
X j  U Zj j  1, 2,..., J Rk The total amount of k type raw material available in feedstock.
Y j , Z j  0 or 1 j  1, 2,..., J Lj, Mj and Hj Portions of product produced using production levels lj, mj and hj

X j , Lj , M j , H j  0 j  1, 2,..., J Constraints on variables

62
 J

J Min fitness f    SPj  X j  PC j     P  , 0  X j  h j

Max profit =   SPj  X j  PC j  j 1

 cm j  cl j
j 1
 j cl 
m  l
 X j  lj  lj  X j  mj , j  1, 2,..., J
PC j  cl j  L j  cm j  M j  ch j  H j  j j

 ch  cm j
J PC j  cm j  j  X j  mj  m j  X j  hj , j  1, 2,..., J
 IC j  B
Mathematical programming

h  m

Metaheuristic techniques
 j j
j 1 0 X j  0, j  1, 2,..., J

IC j  il j  L j  im j  M j  ih j  H j 
J  J   K  
 rm X j  Rk k  1,..., K P     P domain  j      P R  k     P I  
jk  j 1 
j 1    k 1  
L j  Yj j  1,2,..., J 105 if 0  X j  l j
P domain
 j   j  1, 2,..., J
 0 otherwise
H j  1  Yj j  1,2,..., J
 J 
2
J
Lj  M j  H j  Z j j  1,2,..., J  R  k    rm  j   X  j   if R  k    rm  j   X  j 

P R  k    j 1  j 1
X j  l j  Lj  m j  M j  hj  H j j  1,2,..., J  J

0 if R  k    rm  j   X  j 
X j  U Zj j  1,2,..., J  j 1

Y j , Z j  0 or 1 j  1,2,..., J  J 
2
J

P I  
B   IC  j   if  IC  j   B
X j , Lj , M j , H j  0 j  1,2,..., J j 1  j 1

0 otherwise
 im j  il j
No. of variables  j m  l  X j  lj 
il  lj  X j  mj , j  1, 2,..., J
Technique No. of constraints  j j
Binary Continuous  ih  im j
Mathematical programming 54 x 2 = 108 54 x 4 = 216 54 x 5 + 2 + 1 = 273
IC j  im j  j
h  m
 X j  mj  m j  X j  hj , j  1, 2,..., J
 j j
0 X j  0, j  1, 2,..., J
Metaheuristic techniques 0 54 54 + 2 + 1=57 
 63
Thank You !!!