Application of lexicographic goal programming to solve a product mix problem in a large steel manufacturing unit-A case study

The paper describes a case study aimed to evolve an optimal product mix so as to satisfy several management objectives in a large steel manufacturing unit in the public sector of a developing country. Initially, a linear programming approach is made to maximize profit, which yields an optimal aspiration level for profit while the dual solution provides guidelines to further improve it. A follow-up by the lexicographic goal programming approach gives revised product mix programmes which maintain the aspired profit level when the plant operations are perturbed due to shutdowns for renovations and also to achieve desired levels of plant utilization as well as to limit production levels to anticipated market demand.