Production planning with multiple objectives in decentralized organizations

The paper presents a procedure for supporting the process of production planning in decentralized organizations. A situation is considered similar to that of the Dantzig–Wolfe algorithm: several divisions use scarce production resources that are controlled by the top management. In contrast to the Dantzig–Wolfe situation, however, all decision makers – on the top- as well as on the base-level – are assumed to have more than one goal. Therefore, within the process of production planning a hierarchical negotiation between top- and base-level takes place, in which interpersonnel as well as intrapersonnel conflicts have to be solved. The well-known interactive MODM algorithm of Zionts–Wallenius is modified in order to structure the hierarchical negotiation and to model its hierarchical character. The negotiation results in a feasible resource allocation and in a set of aspiration levels for the goals of the top-level which have to be met by the different divisions.