Production planning using dynamic programming approach

Nurhasanah, Nunung and Susanti, Sari (2010) Production planning using dynamic programming approach. Proceeding of The 4th International Seminar on Industrial Engineering and Management (ISIEM), 4. pp. 272-277. ISSN 1978-774X

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Abstract

PT. XYZ is a company which operates in mining and oil area. The production volume was produced in a large quantity with a various item, but in this research was constrained in premium product pursuant to calculation with AHP approach with value 0.328. In fact, demand of the premium was fluctuated so that company made one of the most strategies to control demand with an inventory control ways. Therefore, at this research to control demand use forecasting method to determine its production volume. One of the applying to dynamic programming approach will be able to determine the production volume and optimal inventory quantity in each month. This thing was affected by using dynamic programming approach which had a unique character comparing with the others production planning method. At this case specially, dynamic programming solved a production planning problem with dividing in a few step of stage which in that step contained a few probability which was being happened. The research result was showed with the dynamic programming approach will gived an optimal production and inventory quantity, and company able to minimize the total production quantity and holding cost to 17.88%.

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