Wealth-based production planning with uncertain lot sizing

The lot sizing policy is pivotal to batch manufacturing, especially in uncertain production planning environments. Although progress has been made in this field for some operational local objectives, the optimised results are often rendered unrealistic because few studies have considered the overall business goal and the economic environment where businesses operate. This research aims to examine a stochastic lot sizing production planning optimisation model for make-to-order (MTO) manufacturing with a focus on the overall business goal-the maximisation of shareholder wealth. In addition to the wealth-based optimisation objective, the effect of the economic environment is also incorporated into this model. Numerical experiments validate the significance of considering such economic and financial constraints and objectives, especially for firms with relatively high setup costs or being sensitive to lead times. The proposed production planning model can pretty well assist the management in gaining insight into potential challenges and opportunities pertinent to the shareholder wealth enhancement.