Solving Aggregate Production Planning Problems: An Extended TOPSIS Approach

Aggregate production planning (APP) was developed for solving the problem of determining production, inventory, and workforce levels to meet fluctuating demand requirements over a planning horizon. In this work, multiple objectives were considered to determine the most effective means of satisfying forecasted demand by adjusting production rates, hiring and layoffs, inventory levels, overtime work, back orders, and other controllable variables. An extended technique for order preference via the similarity ideal solution (TOPSIS) approach was developed. It was formulated to solve this complicated, multi-objective APP decision problem. Compromise (ideal solution) control minimized the measure of distance, providing which of the closest solutions has the shortest distance from a positive ideal solution (PIS) and the longest distance from a negative ideal solution (NIS). The proposed method can transform multiple objectives into two objectives. The bi-objective problem can then be solved by balancing satisfaction using a max–min operator for resolving the conflict between the new criteria based on PIS and NIS. Finally, an application example demonstrated the proposed model’s applicability to practical APP decision problems.