Development of simulation-based AHP-DPSO algorithm for generating multi-criteria production-distribution plan

Abstract

Integrated production-distribution plan considering three major objectives, viz., total cost minimization, change in labor level reduction, and underutilization minimization, is developed for a renowned bearing manufacturing industry in India. The total cost minimization objective minimizes the regular, overtime, and outsourced production costs along with inventory holding, backorder, hiring/laying-off, and trip-wise distribution costs. The multi-criteria model is solved using a novel simulation-based analytic hierarchy process (AHP)-discrete particle swarm optimization (DPSO) algorithm. The solutions of the AHP-DPSO algorithm are verified using the AHP-binary-coded genetic algorithm solutions. The proposed simulation-based AHP-DPSO solutions are found to be superior. Demand is assumed to vary uniformly, and the simulation-based AHP-DPSO algorithm is used for obtaining the best production-distribution plan that serves as a trade-off between holding inventory and backordering products. In addition to bearing manufacturing industry dataset, two other test datasets are also solved. © 2011 Springer-Verlag London Limited.