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

E. Karakas*, M. Koyuncu, R. Erol and A. Kokangul

Faculty of Engineering and Architecture, Department of Industrial Engineering, Cukurova University, 01330, Adana, Turkey (Received 21 January 2008; final version received 29 August 2008)

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.

1. Introduction The product mix problem is one of the most well-known applications of linear programming. The problem includes determining both the quantity and the identification of each product to produce. The main structure of the problem is to maximise profit from the mix of manufactured products subject to constraints on the available capacity of resources (Malik and Sullivian 1995).

Activity-based costing (ABC) and the theory of constraints (TOC) represent alternative paradigms for evaluating the economic consequences of production-related decisions. Both paradigms are designed to overcome limitations of traditional cost-based systems and, thereby, provide more relevant information for evaluating the economic consequences of resource-allocation decisions. While their objectives are similar, the means used to achieve these objectives differ significantly (Kee and Schmidt 1998). ABC models the causal relationship between products and the resources used in their production. This enables ABC to provide more accurate product-cost information for evaluating the profitability of the firms product lines and customer base (Cooper et al. 1992). ABC differs from traditional cost systems in two important respects. First it traces indirect cost to cost objects such as products and customers on the basis of factor (cost drivers) that cause or correlate highly with indirect cost. Second, ABC traces indirect costs

ISSN 00207543 print/ISSN 1366588X online 2010 Taylor & Francis

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E. Karakas et al.

on the basis of the structural or hierarchical level at which costs are incurred in the production process. For example many indirect costs are incurred at the batch, product, and facility levels (Cooper 1990). The use of multiple cost drivers and tracing cost at the hierarchical level enables ABC to more accurately model the relationship between the resources used in production and the products. Therefore, ABC provides a better estimate of product cost (Kee 2005). As a result, ABC enables the manager to predict the economic consequences of production related decisions.

Conversely, the TOC represents an application of general systems theory for optimising production. It uses the most constrained of the firms activities to guide production and process improvement decisions (Kee and Schmidth 1998). In the early 1990s, Goldratt (1993) demonstrates the concept of TOC. Later, it is shown that the product-mix decision problem under TOC can be mathematically tackled as a linear programming (LP) model. Many researches have discussed the product mix problem and its solution through TOC (e.g., Luebbe and Finch 1992, Lee and Plenert 1993, Plenert 1993, Frendall and Lea 1997, Balakrishan and Cheng 2000, Coman and Ronen 2000). However, it is revealed that the algorithm is inefficient in handling two types of problems. The first type includes problems associated with adding new product alternatives to an existing production line. The second type includes problems concerning more than one bottleneck in which the algorithm could not reach the feasible optimum solution (Lee and Plenert 1993). Fredendall and Lea (1997) revise the TOC product-mix heuristic to identify the optimal product-mix under conditions where the original TOC heuristic failed. Instead of TOC heuristic, a tabu search-based algorithm is reported by Onwubolu (2001). Onwubolu and Mutingi (2001) present a genetic algorithm-based TOC procedure for solving combinatorial problems encountered in practice which cannot be solved using linear integer programming or similar techniques.

In all of the studies mentioned above, it is assumed that there is not any uncertainty in TOC product mix decision. Conversely, there are some studies in the literature that consist of a certain degree of fuzziness in TOC product mix decision (Vasant et al., 2005, Bhattacharya et al. 2006, Bhattacharya and Vasant 2007).

In addition to these studies, there are many works in the literature about deciding which paradigm to select for production-related decisions (Bakke and Hellberg 1991, MacArthur 1993, Spoede et al. 1994, Holmen 1995, and Lea and Frendall 2002). The complementary nature of the TOC and ABC has also been examined (Kee 1995, Kee and Schmidt 1998, Kee 2003, Kee 2004). Kee (1995) discusses how the principles of ABC and TOC may be used in conjunction with one another. His paper demonstrates that ABC and TOC reflect different aspects of the production process and that concepts of both models may be integrated to provide deeper insights into the firms underlying production process. He develops a mixed integer programming (MIP) model to integrate ABC with physical usage and capacity of production activities, which is called Expanded ABC. In this approach, the cost and physical usage of resources by production is modelled at unit level activities, batch and product level activities.

Having carried out an examination of a vast range of literature on product mix decision and two alternative paradigms (ABC and TOC) for this decision, we have reached the following conclusions: each model overcome a major limitation of the other. To form a larger model that links the costs and physical attributes of production structure, Kee (1995) International Journal of Production Research 731

(1) The strengths of ABC and TOC are complementary in nature. The strengths of

developed a MIP that expands the framework of ABC to incorporate the resource usage of products and the capacities of the processes used in production (expanded ABC).

(2) Although, there are some studies in the literature that consist of a certain degree of

fuzziness in TOC product mix decision, none of the studies based on Expanded ABC takes into account possible fuzziness in some information about production such as demand and production capacity. However, most of the real-life problems and models contain linguistic variables and constraints or imprecise data.

The main purpose of this paper is to develop a mathematical modelling approach based on Expanded ABC to define optimal product mix under the conditions where fuzziness in demand of the products and capacity of the activities exist.

Spoede et al. (1994), Kee (1995) and Kee and Schmidt (1997) examined how the principles of ABC and TOC may be used in conjunction with one another. It is demonstrated that ABC models the economic aspects of how resources at the unit, batch and product-level activities are transformed into the firms products. ABC represents a long term perspective of how costs vary with production (Kee 1995). On the other hand, ABC has generally been criticised for its failure to incorporate the physical usage of resources by production activities and the capacity constraints of the activities (Spoede et al. 1994).

Conversely, the principles of the TOC reflect how the physical resources consumed by production activities and their production capacity play a critical role in the production process. This means that the TOC is based on managing production constraints. However, one of the limitations of the TOC concerns using throughput maximisation as decision criteria. This may lead to sub optimal decision in some circumstances (Kee 1995). Because of these limitations, the studies of Spoede et al. (1994), Kee (1995) and Kee and Schmidt (1997) are based on integrating ABC and TOC to form a larger model that simultaneously links the cost and physical constraints of a firms production. Kee (1995) expands the ABC model, which is called Expanded ABC explicitly to recognise the physical usage of resources and the capacity of the production activities. Unlike the study of Spoede et al. (1994), in the study of Kee (1995) product mix decision is made within the framework of the ABC model. As noted earlier in our study, the proposed mathematical model is based on the MIP model developed by Kee (1995). The main reason for taking this model as a base in this study is its capability of capturing the integration between the costs, physical resources, and the capacity of production activities. The model enables an optimal production mix to be determined from simultaneous evaluation of ABC data and physical attributes of the production process (Kee 1995). However, a product mix based on the solution of the model developed by Kee (1995) results in success only when each activity capacity is stable and the demand of each product is precise. As known, most of the real-life problems and models contain linguistic variables and constraints or imprecise data. Therefore, we present a fuzzy programming for product mix selection in the light of obscure estimation of parameters for the capacities of the activities and the demands of each product.

732

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In Section 2.1, we give the formulation of the MIP model based on Expanded ABC approach. Problem formulation incorporating fuzzy constraints is then explained in Section 3. 2.1 Problem formulation In this approach, three activity levels; the unit-level, the batch-level, and the productlevel, are included in the product-mix decision model by using three different kinds of decision variables described below: Xi: the number of units of product i produced in a given time period, i 1, 2, 3 . . . N. Yi: the number of batches of product i produced in a given time period, i 1, 2, 3, . . . N 1, if product i is produced in a given time period, i 1, 2, 3, . . . , N: Zi In this model, Xi and Yi K are integer variables, Zi is e a binary variable. e

( 0, if product i is not produced in a given time period, i 1, 2, 3, . . . , N:

i u

The costs of unit-level activities are assigned in proportion to 1 the number of products9 produced. Therefore, as the9 volume of production5 increases, the costs of this kind , of activities increase. In batch G related activities, resourceu consumption is proportional tor the number of batchess processed. A batch drivere assigns the cost of an activitys to a batch. Product-sustaining activities are performed in1 order to continue to produce9 and sell individual products.9 The costs of these activities 9 can be traced to each product ) but should not be allocated. based on the number of units Th or batches produced, because e they are not affected by the pa level of production volume. The ra m only way to eliminate the cost et of product sustaining activities er is to discontinue the product s

p e r u n i t u s a g e o f a c t i v i t y u b y

p r o d u c t i a

i b

p e r b a t c h u s a g e o f a c t

i v i t y b b y p r o d u c t i a

i p

p e r p r o d u c t

usage of activity p by product i cr of unit level activity u for each product i cr batch activity b for each product i per batch cr product -sustaining activity p for each product i per batch C of unit-level activity u C of batchlevel activity b C of productlevel activity p performed bs size of product i si product i dm material cost of product i dl

l a b o r c o s t o f p r o d u c t i D

i

t i NU: the total number of unit level activities, NB: the tota l nu mb er of unit lev el and bat ch lev el acti viti es, NP: the tota l nu mb er of acti viti es,

: d e m a n d o f p r o d u c

International Journal of Production Research The problem, then, can be written in MIP problem (Model 1) form as follows: Model 1

N

733

Maxs

i

i 1

dm

i

d l

i

N U

NB

NP

X

i

a crX

i u u

a crY

a crZ

ip p

p NB 1 i 1

i

b

u 1i 1

NU 1

X

ib b

i 1

XX

Subject to

N

X a X C

i1 iu i

N

u 1, . . . NU

X a Y C

i1 ib i

N

b NU 1, . . . NB

X a Z C

i1 ip i

p NB 1, . . . NP X i

i

bsY

i i

1, . . . N i 1, . . . N

6 7

Xi MZi Xi

i Di 1, . . . N All variables are greater than or equal to zero. Xi and Yi are integer variables; Zi is a binary variable. M is a very big number.

Equation (1) or objective function reflects the goal of maximising the profit. Constraints (2) to (4) reflect the capacity-related constraints for unit level, batch level and product level activities, respectively. Constraint (5) must be included in the model for each product manufactured in the system to define the batch sizes. This constraint guarantees that whenever one unit of a product i is manufactured, the relevant batchlevel activity costs are incurred in the objective function. Constraint (6) ensures that

whenever product i is produced, the relevant product-sustaining activity costs are incurred in the objective function. 3. Problem formulation incorporating fuzzy constraints

As noted earlier, a product mix model in Section 2.1 can give an optimal solution when each activity capacity is stable and the demand of each product is precise. As an optimal solution for product mix problem is determined according to the capacities of each activity and the number of forecasted demand, the optimal solution is not appropriate to implement when it is difficult to forecast or to estimate the parameters precisely. Also, in real production problems, it is supposed that parameters involved in an objective function

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E. Karakas et al.

and constraints, such as demands or production capacities, are forecasted or estimated by experts judgements and therefore such values are not always precise (Skawa et al. 2001).

In this section, for cases where demand and capacity parameters cannot be forecasted precisely, we incorporate fuzzy constraints for formulating the product mix determination problem based on ABC. For production capacity constraints and demand constraints of the fuzzy model

N

Xi 5Cu

1, . . . NU

i1

iu

a Y 5C

i

i1

ib

1, . . . NB

i1

a Z 5 i Cp

ip

p 1, . . . NP i 1, . . . N

1 0

1 1 We employ linear membership function as depicted in Figure 1 and Figure 2 for capacity and demand constraints respectively. Xi 5Di

Suppose that there exists a fluctuation 100(1 vi)% in maximum annual demand of each product, and there is a possibility that an actual capacity of each unit level activity is 100(1 tu)% of the estimated capacity, an actual capacity of each batch level activity is

Cu (Mu)

(1tu)Cu

u

u

Figure 1. A membership function of fuzzy constraints for the unit level activity capacities.

Di(xi) 1

Xi (1ni)Di Di

735

100(1 b)% of the estimated capacity, and an actual capacity of each product level activity is 100(1 p)% of the estimated capacity. Then, the membership function of the fuzzy capacity constraints for unit level activities is defined as 1 u , X C M 8

Cu

M

>

> t C

u <

i 1

>

0,

>

: where X

N

Mu a

i

13

tu: tolerance limit for each of the unit level activity capacity

Using the same membership function, fuzzy constraints for the batch level and product

C b

where

b:

1 8 , >

C

C

p

K

p

Kp 1 pCp

Kp

>

>

Cp

Cp

Kp

Cp

1 6

>

<

>

>

0,

Kp

Cp

>

>

: where

K X

p

a Z

i1

ip i

p:

tolerance

7 3 6

E. Karakas et al. The membership function of the fuzzy demand constraints is defined as; 8 1, X

D

i

Xi 1 iDi D ,

D

i

Di > Xi

>

1 8

>

<

i

Xi 4Di

>

0,

>

>

:

i:

A linear programming problem with fuzzy constraints in this form can be solved by a multi-objective optimisation problem (Rommelfanger 1996). Therefore, the membership function of objective function (z(x)) must be described. Then, the membership functions

z(x)

>

z z = z z , z 5z 5z

z z

19

>

& <

> 1, >

& z z

While z is computed based on the lowest value of demand for each product and the lowest capacity for each activity, z is computed based on the highest value of them.

Consequently, a linear programming problem with fuzzy constraints can be solved by a classical linear programming problem using the method as follows (Zimmermann 1978)

max s:t ix x 2 XU

zx

i 1 . . . m1 and 2 0, 1&:

4. A numerical example To illustrate the integration of fuzzy demand and capacity with expanded ABC based product mix determination problem, consider the example provided by Kee (1995). The example is presented in Table 1 through 3. XYC Inc. is a medium-sized firm with two production departments, assembly and finishing, and three support departments, set-up, purchasing and engineering. Direct material and labour are traced directly to

the individual products. Unit level overhead is estimated using direct labour cost as the cost driver. Set-up and purchasing costs are incurred at the batch level, engineering is incurred at the product-sustaining level (Kee 1995). To make the proposed model consistent with the data by Kee (1995), some slight modifications in the model are conducted in this section. First of all, as seen from Table 2, there exist two batch-level activities whose batch sizes are different from each other. So, the model must include two different decision variables to reflect these activities instead of the general decision variables Yi. STi: the number of set-ups of product i produced in a given time period PRi: the number of batch of product i processed by purchasing department in a given time period. International Journal of Production Research 737

Table 1. Unit level activity cost-capacity and operating structure. Product Product 1 Product 2 Product 3 Product 4 Capa city 200,0 00 180,0 00

Assembly labour hours Finishing labour hours Direct material cost Direct labour cost Overhead cost Price Maximum annual expected demand

Table 2. Batch -level activities. Product Set-up department Batch size (units) Hours/batch X 1 1000 2 X2 1000 2 X 3 50 0 4 X4 200 5

Cost per set-up hour Expected capacity(hours) Purchasing department Batch size (units) Orders/batch Cost per purchase order 4000 5 4000 8

$ 4 0 0 5 0 0

10 00 12

500 15

Expected Capacity(orders)

2 0 0 8 0 0

Table 3. Product-level activities. Product Engineering Department Drawings/product Expected capacity Cost per engineering Drawing X 1 10 0 X2 100 X3 300 X4 50 0

1000 $1000

Second, in this example, unit level cost is estimated using direct labour cost as the cost driver in accordance with the study of Kee (1995). So the objective function of the Model 1, which is denoted by Equation (1), is revised as seen in Equation (21). Ovr: Taken as a percentage of direct labour cost (in this example, 300% of direct labour cost was accepted as unit level cost driver, so ovr 3 for this numerical example.) E. Karakas et al.

7 3 8

Max

si dmi dliXi

ovrdli

Xi

ai3cr3STi

ai4cr4PRi

ai5cr5Zi

i 1 i 1 i 1 i 1 i 1

21 Subject to

N

i

X

1

a Xi 5Cu

iu

1... 4; u

1, 2

2 2

a

X

i1

i 3

STi 5C3

1.. .4

2 3

a

X

P R

i

5C

4

i1

i 4

1.. .4

2 4

X

i1

a Zi 5C5

i5

1... 4 1.. .4

2 5

bsY

i

i

X i

i

2 6

Xi MZi

X

i

i 1...4 i 1...4

27

2 8 Using the approach denoted by Equations (20a) to (20d), we transformed model 2 as follows 5Di Max ; Subject to

4 i1 4

i1

a cr ST X

i3 3

i

i1

ai4cr4PRi

29 30

i1

ai5cr5Zi z z z

4

i1

aiuXi Cu tuCu u 1, 2

31

32 739

M X

u

a X

i1

iu i

u 1, 2

3 3

i1

ai3STi C3

3C3

b3

3 4 3 5 3 6

C3

W33C3 C3 W3 b 3

4

W X a ST

3

i1 i3

b3

i1

ai4PRi C4 4C4 b 4

3 7 3 8 3 9

C4

W44C4 C4 W4 b 4

4

W X a PR

4

i1 i4

b4

i1

ai5Zi C5 5C5 p 5

4 0 4 1 4 2 43

C5

K55C5 C5 K5 p 5

4

K X a Z

5

i1 i5 i

p5 1... 4

Di

Di

4 4

45 i i i i1... 4 Xi MZi 4 6 Equations (32) to (33), Equations (35) to (36), Equations (38) to (39), Equations (41) to (42) and Equation (44) enable us to calculate the value of the membership function of fuzzy unit-batch-product level capacities and membership function of fuzzy demand of each product, respectively. The transformed capacity constraints and demand

constraint are given in Equations (31), (34), (37), (40) and (43).

Suppose that there exists a fluctuation 20% in demand at each product and there is a possibility that actual capacities of unit level, batch level and product level activities are

740

E. Karakas et al.

80%, %90 and %90 of estimated capacity respectively. Then, z and z are computed as 3,732,000 and 4,620,000, respectively.

The proposed model is solved using CPLEX 300 solver in MPL Package Program. The solution of mixed integer programming model (Kee 1995) and fuzzy model are given in Table 4 and Table 5. In mixed integer programming model, the optimal production strategy consists of producing 30,000 units of product 1, 100,000 units of product 2, 30,000 units of product 3. The product mix is computed by ranking each product in terms of its profitability and producing the products with the highest profitability at the limit of the capacities. The proposed fuzzy model uses the same ranking method with ABC cost data, however it offers a product mix strategy avoiding output at the limit of activities capacity and producing more quantity of products than %80 of the forecasted maximum demand. As seen in Table 4, fuzzy application contains 35,668 units of product 1, 89,163 units of product 2, and 26,748 units of product 3. As production of product 2 and 3 decreases in

Table 4. Solution of the models. Production quantity of each product X1 X2 X3 X4 The number of batch for each activity ST1 ST2 ST3 PR1 PR2 PR3 Z (Profit) *Kee (1995) Table 5. The values of the membership function in fuzzy application. Capacity constraints Assembly department Finishing department Set-up department Purchasing department Engineering department Production demand constraints Product 1 Product 2 Product 3 Membership function value of the capacities 0.541 1 0.64 1 1 1 0.541 0.542 Outputs of fuzzy model 35,668 89,163 26,748 0 36 90 54 9 23 27 4,260,000 Outputs of MIP* 30,000 100,000 30,000 0,000 30 100 60 8 25 30 4,227,809

1 0.542

741

fuzzy application in order not to make products at the limit of the capacity, the profit of the fuzzy application is 4,227,809 while the profit of MIP is $ 4,260,000. Because membership function of each fuzzy constraint for the capacity of each activity is identified such that a degree of satisfaction becomes 0 if the output run up to a limit of the capacity and it becomes 1 if the output is smaller or equal to %80 of the capacity, as seen in Table 5, generally each output is %80 of the activity capacity except assembly activity and set-up activity. Similarly, the membership function of each of the fuzzy constraints for demand of the products is identified such that a degree of satisfaction becomes 0 if the production runs up to forecasted demand and it is 1 if the production is smaller or equal to %80 of the forecasted demand, as seen in Table 5, a degree of satisfaction is equal to 1 for product 1 and 4 and it is equal to 0.541 and 0.542 for product 2 and product 3 respectively.

Table 6 shows the slack capacity of non-constrained activities according to the solution of fuzzy model and MIP model. The slack variables for demand constraints in Table 6 indicate the units of products that the firm will be unable to supply. These values are 70,000 units of demand for product 1 and 20,000 units of demand for product 4 in MIP and 53,445 units for product 1 and 17,832 for product 4 in fuzzy application. In fuzzy application, the slack values for demand constraints are lower because fuzzy model offers a product mix strategy taking %80 of the forecasted maximum demand as actual demand. As indicated, assembly and finishing will have 10,000 and 55,000 excess labour hours of capacity in MIP model, respectively. However, in the fuzzy model finishing will have 44,583 excess labour hours and assembly will have no excess labour hours. Also, in the MIP model solution, purchase and engineering will have excess capacity of 200 purchasing orders and 500 engineering drawings. However, excess capacities of each of these activities will be 203 purchasing orders and 445 engineering drawings, respectively in fuzzy application. As a result, while set-up department is a constrained activity in MIP model solution, both assembly and set-up are constrained activities in fuzzy application.

As we know, constrained or bottleneck activities are critical for maximising production and profitability and minimising excess resources of the other activities. Improving a constrained activity relieves a bottleneck, thereby increasing throughput. (Kee 1995). According to fuzzy model solution there are two constrained activities (assembly and set-up activities) as different from the study of Kee (1995). The impact of expanding the capacity of set-up can be evaluated by increasing the amount of set-up time in the fuzzy model while assembly capacity is kept constant. In the same way, the impact of expanding the capacity of assembly can be evaluated by increasing the amount of assembly time while

Table 6. The values of the slack variables. Slack variables Excess capacity in the assembly department Excess capacity in finishing department Excess purchase order capacity Excess capacity in engineering Excess demand for product 1 Fuzzy application 44,583 203 445 53,445 MIP application** 10,000 55,000 200 500 70,000

17,832

20,000

7 4 2

E. Karakas et al.

49,00,00 0 48,00,00 0 47,00,00 0 46,00,00 0

p r o f i t ) Z ( $

45,00,00 0

450

500

550

600

700

750

800

43,20,000 43,10,000 Z 43,00,000 42,90,000 42,80,000 42,70,000 42,60,000 42,50,000

42,40,000 42,30,000

42,20,000

1,95,0 00

a ng in this activity will not assembly capacity, it can be Assembly d provide moreunderstood that increasing the capacity (hours) d improvement in profit. Atcapacity of set-up activity can i this point, assembly willprovide more improvement. Figure 4. The impact of increasing assembly capacity t have a key role to expand As seen in Figures 3 and 4, i production and profitthe maximum value for profit on the profit.

o further, additionalwill be $ 4,853,000 if set-up n resources would need tocapacity is increased while it set-up capacity is kepta be added to the assemblywill be $ 4,310,800 if assembly department constant. Figure 3 andl departments. Figure 4 show the impact of As seen in Figure 4,capacity is increased. The expanding the resources ini expanding the resourcesmaximum value for profit will set-up and assembly,n in the assemblybe obtained at 22,000 hours relatively. c department will increaseassembly capacity. As seen in Figure 3,r profitability. However, As a result, the fuzzy model increasing set-up capacitye when compared to thefor product mix determination has an important impact ona impact of expanding set-based on the expanded ABC the profit. However, whens up activity on profit withmodel can work out an optimal set-up time has beeni the impact of expandingproduct mix plan when demand cannot be estimated increased up to 700, any

743

precisely and the limits of capacities are not stable. Also, using the sensitivity analysis, the bottleneck constraint can be identified and therefore management can begin continuous improvement process under these circumstances.

5. Conclusion

In this paper, we have considered product mix determination problem based on the expanded ABC approach proposed by Kee (1995). We have presented a fuzzy programming for product mix selection in the light of obscure estimation of parameters for the capacities of the activities and the demands of each product. The proposed model, thereby, can handle impreciseness in some parameters involved in an objective function and constraints in real-life production problems, such as demands or production capacities.

The differences between the solution of the MIP (based on precise information about the capacity and demand) and the solution of the fuzzy model indicate that the uncertainties should be taken into account under the circumstance where imprecise information about demand and capacities of activities exist. Otherwise a firms manager can give a wrong production related decision and can be faced with the unaffordable cost of this decision. In addition to these benefits, the solution of the fuzzy model also identifies nonconstraint activities with their excess resources and constrained activities. Therefore, the model may be used to identify the constraint that limits production before production has begun and then constraint identification provides a starting point for managing bottleneck activity.

References

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Bhattacharya, A. and Vasant, P., 2007. Soft-sensing of level of satisfaction in TOC product-mix decision heuristic using robust fuzzy-LP. European Journal of Operational Research, 177 (1), 5570.

Bhattacharya, A., et al., 2006. A fully fuzzified, intelligent theory of- constraints product mix decision. International Journal of Production Research, 46 (3), 798815. Coman, A. and Ronen, B., 2000. Production outsourcing: a linear programming model for the theory of-constraints. International Journal of Production Research, 38 (7), 16311639. Cooper, R., et al., 1992. From ABC to ABM: Does activity-based management automatically follow from an activity-based costing project? Management Accounting, 74 (5), 5457. Cooper, R., 1990. Cost classifications in unit-based and activity-based manufacturing cost systems. Journal of Cost Management, Fall, 414. Fredendall, L.D. and Lea, B.R., 1997. Improving the product mix heuristic in the theory of constraints. International Journal of Production Research, 35 (6), 15351544. Goldratt, E.M., 1993. What is the theory of constraints? APICSThe Performance Advantage, 3 (6), 1820. Gurses, P.A., 1999. An activity- based costing and theory of constraints model for product-mix decisions. Thesis (Master of Science). Faculty of the Virginia Polytechnic Institute and State University.

E. Karakas et al.

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