A game theoretic approach to product-mix resource allocation

Abstract

In view of the common issue of product-mix resource allocation decision under limited manufacturing resource, this article proposes a new approach based on game theory. Firstly, a quantification method is applied to represent the utility of manufacturing resource and strategy profile, and then a multi-dimension game model is presented using these quantified manufacturing data as element of game theory. By solving the game model, the Nash equilibrium solution is regarded as optimal resource allocation strategy. The goal of the solution is to maximize the individual profit of each product. The desired equilibrium will meet the requirements for resource by the greatest degree to make each product achieve optimal production status, simultaneously the enterprise will get higher rate of return on investment.