A goal programming model for production planning of perishable products with postponement Stephen C.H. Leung * , Wan-lung Ng Department of Management Sciences, City University of Hong Kong, Hong Kong Received 3 May 2006; received in revised form 28 May 2007; accepted 28 May 2007 Available online 2 June 2007 Abstract One of the important characteristics of perishable products that a decision-maker has to take into account seriously is that the price will drop significantly after a day, or a season. Hence, over-production and storage of such products is not recommended. In this paper, the production process for perishable products is proposed to be divided into two phases by applying the concept of postponement. Consequently, three production activities – direct production, master production and final assembly – will be considered. A preemptive goal programming model to solve aggregate production planning for perishable products is developed, in which three objectives are optimized hierarchically. A set of Hong Kong data has been used to test the effectiveness and the efficiency of the proposed model. Results demonstrate that the decision-makers can find the flexibility and robustness of the proposed model by adjusting the goal priorities with respect to the importance of each objective and the aspiration level with respect to desired target values. Ó 2007 Elsevier Ltd. All rights reserved. Keywords: Production management; Goal programming; Perishable products; Postponement 1. Introduction Postponement of production refers to a common intermediate product being manufactured in the first phase and, according to the differentiating options (such as colors, sizes and types), production line activities such as dyeing, compounding, final assembling, packaging and so on being postponed to a second phase – i.e. until customer orders are received (Aviv & Federgruen, 2001a; Aviv & Federgruen, 2001b; Van Hoek, 2001). Lee and Billington (1994) redesigned a European DeskJet Printer line of Hewlett Packard using the postpone- ment strategy. Pagh and Cooper (1998) stated that the advantage of postponement is reduction or full elim- ination of risk and uncertainty in manufacturing and logistics operations. Garg and Tang (1997) investigated two points of postponement in the manufacturing stage – early postponement and late postponement – and investigated the importance of demand variabilities and correlations between, and relative magnitudes, of lead times in determining the appropriate points of differentiation. Aviv and Federgruen (2001b) studied the benefit 0360-8352/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.cie.2007.05.010 * Corresponding author. Tel.: +852 2788 8650; fax: +852 2788 8560. E-mail address: mssleung@cityu.edu.hk (S.C.H. Leung). Computers & Industrial Engineering 53 (2007) 531–541 www.elsevier.com/locate/dsw