Optimal Production Planning

Companies in the Consumer-Packaged Goods Industry are faced with a chronic dilemma: efficiency vs. agility. Companies must balance scale, which creates cost-saving opportunities, and flexibility, which often incurs incremental costs. Following extensive cost structure analysis and mapping of the company¿s supply chain network, a comprehensive Mixed Integer Linear Programming model was created. The model¿s objective function is cost minimization, which it must attempt considering ¿current-state¿ inputs and multiple operational constraints. The results suggest that a hybrid production planning strategy between ¿level-production¿ and ¿demand-chase¿ is preferred, and can generate significant cost savings. In summary, this strategy can help companies enhance their efficiency and reduce costs when optimizing the total end-to-end supply chain, instead of using department-based budget management.