A Clearing Function for Multi-Product Production Planning Based on Price and Lead Time Sensitive Demand

- Customers are more likely to pay for a shorter lead time the more sensitive they are to lead time. In three periods, the smoothing for multiple products (P_MCFS) model can meet the same amount of demand. It makes sense that the P_MCFS model's longer lead time would result in a lower demand. When lead time is more important to consumers than price, the model with flexible production for multiple products (P_MCFF) model exhibits a substantial price rise for high utilization levels. Businesses may charge a significantly higher price when there is less demand sensitivity and clients are willing to pay more for a shorter lead time. Businesses are compelled to cut their prices when a market segment is solely price-sensitive, which lowers their profit per unit sold. Consumers who value lead time are prepared to spend more, which means that a larger profit may be made. In this situation, businesses that are unable to complete demand orders within the minimal lead time may suffer penalties. Due to a smoothing constraint, this was demonstrated by a significantly reduced demand and profit loss in the P_MCFS model. The way that customers react to a firm's lead times and price greatly influences the development cycle of that company. Using the same input that is available under the numerical investigation, we run the three models using IBM CPLEX software and conduct a comparison analysis.