Tabu search-based algorithm for the theory of constraints product mix decision

The theory of constraints (TOC) is a management philosophy that maximizes profits in a manufacturing plant with a demonstrated bottleneck. The product mix decision is one application of TOC that involves determination of the quantity and the identification of each product to produce. However, the original TOC heuristic is considered to produce unrealizable solution when a manufacturing plant has multiple resource constraints. This paper presents a tabu search-based TOC product mix heuristic to identify optimal or near optimal product mix for small problem instances under conditions where the original TOC heuristic failed. The tabu search-based TOC product mix heuristic is further used to solve large problem instances typical of practical manufacturing scenario. The experimental results for small to medium size problem show that the tabu search-based TOC heuristic compares favourably with those of optimal methods. Large size problems for which optimal methods have not been established in terms of feasibility in computation times were also solved in reasonable times with good quality solutions, thus confirming that the proposed approach is appropriate for adoption by production planners for the product mix problem in the manufacturing industry.