Nomenclature

y Notation:
P : Number of products p = [1,2,.,P].
T : Number of planning intervals t =[1,, X,,T].
Reg : Regular time
Over : Over time

y Parameters:-
Dem
pt

: Demand of product p during interval t (number of units).
Cap
reg

: Production capacity of product p at regular time Reg (number of units).
Cap
over
: Production capacity of product p at over time Over (number of units).
Inv : inventory capacity (number of units).
C
Mp

: Batch raw material cost of product p.
C
Rp
: Batch production cost of product p at regular time Reg.
C
Op
: Batch production cost of product p at over time Over.
H
p

: Unit inventory cost of product p during one interval.
b
p
: Unit back order cost of product p during one interval.
S
P
: Unit Selling price of product p during one interval.
n
pt
: batch size of certain product p
R : target sales income

y Decision variables
Qreg
pt

: Number of batches of product p during the planning interval t at
regular working time Reg.
Qover
pt

: Number of batches of product p during the planning interval t at
over time Over.
Qdel
pt

: Number of units delivered of product p at the end of interval t.
Qhold
pt

: Number of units stored of product p at the end of interval t.
P[

Qshort
pt
: Number of shortage units of product p at the end of interval t.
















The objective function of the model:

shoit

The objective function minimizes the total cost. The total cost includes the direct cost and
indirect cost of the product during the planning horizon (multiple planning intervals). Direct
cost (prime cost) is direct material cost and direct production cost. Indirect cost (overheads)
is manufacturing cost, commercial cost and other costs. Manufacturing cost includes indirect
material cost such as holding, handling, maintenanceetc. commercial cost includes
administration cost, marketing cost,etc.
Total cost = raw material cost + regular production cost + over time production cost +
inventory holding cost + shortage cost + other overheads
The objective function consists of the following elements:

y Raw material cost
This is the cost of raw material of products at the facility during all planning intervals.

It is the product of unit raw material cost of product p (

) and the summation of Number

of batches of product p during the planning interval t (

) at regular working time Reg,

and Number of batches of product p during the planning interval t (

) at over time
Over.

y regular production cost
This is the cost of production of product p at regular time (Reg) during all planning
intervals. It includes labor cost, machine utility cost, and all other variable costs involved at
the facility at regular time (Reg).

It is the product of the batch production cost of product p (

) at regular time Reg, and

summation of Number of batches of product p during the planning interval t (

) at
regular working time Reg.






y over time production cost
This is the cost of production of product p at over time (Over) during all planning intervals.
It includes labor cost, machine utility cost, and all other variable costs involved at the facility
at over time (over).

It is the product of the batch production cost of product p (

) at over time over, and

summation of Number of batches of product p during the planning interval t (

) at over
time Over.



y Holding cost
The holding inventory cost of the products over a time interval t.

B

holu

n
p
ieg
pt
n
p
ovei
pt

p t

It is the product of unit inventory cost of product p during one interval (B

) and summation
number of units stored (

) of product p at the end of interval t. where number of units
stored (

) of product p at interval is the difference of summation of number of
produced product (during regular time and overtime) and summation of number of units
delivered of product

p at the end of interval t.

by assuming that the beginning inventory is equal to zero, then we can say that if
X=1

(Q reg
1st
+Qover
1st
)- Qdel
1st
= Qhold
1st
X

(Q reg
1st+2nd
+Qover
1st+2nd
)- Qdel
1st+2nd
= Qhold
2nd
X=3

(Q reg
1st+2nd+3rd
+Qover
1st+2nd+3rd
)- Qdel
1st+2nd+3rd
= Qhold
3rd



y Shortage cost
This is the penalty cost paid due to unsatisfying full customers demand at each planning
interval.

shoit

shoit

uem

p
It is the product of unit backorder cost of product p during one interval (b
p
) and summation
of number of shortage units of product p (Qshort
pt
) at the end of interval t . where number
of shortage units of product p (
shoit

) is the difference of summation demand uem

of
product p during interval t and number of units delivered of product

p at the end of
interval t.





Model constraints
The previous objective function is subject to the following constraints.

y Income constraint:-

R t


This constraint is for the target income. This constraint ensures that the income from all
products during interval t must be larger than or equal target R.
The income is the product of unit selling price of product p during one interval (S
P
) and
number of units delivered (Qdel
pt
) of product p at the end of interval t.

y Regular Capacity constraint :-
n
p
Qregp
t
Cap
reg
P,t




This constraint is for the regular capacity at each planning interval t of certain product p.
This constraint ensures that the product of number of batches (Qreg
pt
) of product p during
the planning interval t at regular working time Reg and batch size (n) of certain product p
does not exceed Production capacity(Cap
reg
)of product p at regular time Reg





y overtime Capacity constraint:-

n
pt
Qoverp
t
Cap
over


P,t



This constraint is for the overtime capacity at each planning interval t and certain product p.
This constraint ensures that the product of number of batches (Qover
pt
) of product p during
the planning interval t at overtime over and batch size (n
p
) of certain product p does not
exceed Production capacity (Cap
over
) of product p at overtime over


y Inventory capacity constraint:-
This constraint is for the capacity of inventory.

Inv

t
This constraint ensure that the summation amount stored in the inventory

for all
products at each planning interval t does not exceed the inventory capacity Inv









y Demand constraint:-
There are two demand constraints.
-The first for customer that will not to be delivered exceed his demand .
Qdel
pt
Dem
pt
P,t
This constraint is to ensure that the number of units delivered (Qdel
pt
) of product p at the
each interval t does not exceed the demand uem

of each product p during each interval t.

-The second for production quantity which must be more than or equal demand required.
Dem
pt
(n
p
Qreg
pt
+ n
p
Qover
pt
) P,t

This constraint is to ensure that the demand uem

of each product p during each

interval t does not exceed the quantity produced during regular time and overtime.
















y Quantity delivered constraint:-
This constraint is for the quantity delivered.

p t


such that
Qdel
pt

t=0
= 0


This constraint is to ensure that the number of units delivered (Qdel
pt
) of product p at the
end of interval t does not exceed the sum of quantity produced during regular time and
overtime and summation amount stored in the inventory

for each product at

each previous planning interval t-1.


y Minimum quantity constraint
This constraint is for the minimum quantity produced for each product.

(n
pt
Qreg
pt
+ n
pt
Qover
pt
) k
pt
P,t
This constraint is to ensure that sum of quantity produced during regular time and overtime
is more than or equal minimum size produced (k
pt
)of product p during interval t.


y Non negativity and integrity constraints :-
Qreg
pt
, Qover
pt
, Qhold
pt
, Qdel
pt
, Qshort
pt
0 & integer pt

All of decision variables must be more than or equal to zero and integer.