Method for Procurement-Production Strategy Optimization in Discrete Manufacturing Environments

The main purpose of this paper is to develop a method for strategy optimization of the integrated procurement-production system. A mathematical model of this system is developed, which has an optimal control framework of time varying delay-difference systems. The optimal control problem (OCP) is converted into a nonlinear programming (NLP) problem, and then a global optimal solution to this problem is found by solving a sequence of unconstrained optimization problem (UOP) based on Genetic Algorithms (GAs) when the penalty parameter is introduced. We illustrate our results on a case-firm in the office supplies industry. The case study shows that the results can help managers better plan their firm´s strategy.