Fuzzy programming for optimal product mix decisions based on expanded ABC approach

In this paper, we deal with the problem of determining the optimal product mix and production quantities based on expanded ABC (activity-based costing) approach in the presence of obscure estimation of parameters for the capacities of the activities and the demands of each product. First, we give th...

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Bibliographic Details
Published inInternational journal of production research Vol. 48; no. 3; pp. 729 - 744
Main Authors Karakas, E., Koyuncu, M., Erol, R., Kokangul, A.
Format Journal Article
LanguageEnglish
Published Abingdon Taylor & Francis Group 01.01.2010
Taylor & Francis
Taylor & Francis LLC
Subjects
Applied sciences
Demand
Exact sciences and technology
expanded ABC
Firm modelling
Fuzzy
Fuzzy logic
fuzzy methods
Fuzzy set theory
Inventory control, production control. Distribution
Marketing
Mathematical models
Mathematical programming
Operational research and scientific management
Operational research. Management science
Optimization
Parameter estimation
Product mixes
product-mix
Profit maximization
Programming
Studies
Production system
Parameter estimation
Quantity production
Membership function
Fuzzy system
Mixed programming
Decision making
Programming environment
fuzzy methods
Fuzzy programming
Modeling
expanded ABC
Fuzzy logic
Optimal decision
Production management
Zero one programming
Mixed model
Profit
System identification
product-mix
Cost analysis
Manufacturing cost
Mathematical programming
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ISSN0020-7543
1366-588X
DOI10.1080/00207540802471249

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Summary:In this paper, we deal with the problem of determining the optimal product mix and production quantities based on expanded ABC (activity-based costing) approach in the presence of obscure estimation of parameters for the capacities of the activities and the demands of each product. First, we give the mixed zero-one programming model such that the profit is maximised subject to capacities of activities and demand of products. Second, to handle vagueness of capacity and demand in real-life production systems in fuzzy environments, fuzzy programming is presented. We employ linear membership functions for the capacity of each activity and demand of each product. Using the data in the study of Kee ( 1995 ), we show the usefulness of the fuzzy model.
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ISSN:0020-7543
1366-588X
DOI:10.1080/00207540802471249