On optimal partially integrated production and marketing policy with variable demand under flexibility and reliability considerations via Genetic Algorithm

In this paper, we investigate the effects of partially integrated production and marketing policy (PIPM) of a manufacturing firm which produces single item with a finite rate. The demand of that item is dependent on its selling price, marketing cost and quality. However, the selling price is determined by a mark-up (prescribed) over the unit production cost dependent on the several factors of the manufacturing system. Incorporating the effects and the possibilities of defective units in the production process, the model is developed by formulating constrained maximization problem of marketing department and minimization problem of production department. Problems are solved by Generalised Reduced Gradient (GRG) method and simple Genetic Algorithm (SGA). Finally, to illustrate the results, a numerical example is given and the results for different methods are compared with each other.