How to select projects and allocate funds to obtain the total maximum profit for facing many different investment projects in the production strategy management plan of discrete production enterprise
How to select projects and allocate funds to obtain the total maximum profit for facing many different investment projects in the production strategy management plan of discrete production enterprise

Author(s): Bao Gang, Pavel Vitliemov
Subject(s): Economy, Business Economy / Management, Accounting - Business Administration, Business Ethics
Published by: Национално издателство за образование и наука „Аз-буки“
Keywords: production investment; K-means clustering analysis; TOPSIS method; dynamic programming; screening and allocation; maximum return on investment
Summary/Abstract: The market is developing rapidly, and the choice of production investment projects presents diversity and complexity. Manufacturing enterprises not only need to select high-profit target products (multiple target products) suitable for their own production but also need to reasonably allocate limited resources to ultimately obtain the maximum total income of all investment projects. Therefore, manufacturing enterprises are faced with many challenges when selecting production investment projects and allocating limited resources. In the process of selection and allocation, enterprises need to combine their own conditions to select investment and production, strengthen cost management, and pursue the maximization of investment benefits. Here, our research in this area becomes important. This paper proposes a new method to establish an efficient process of investment project selection and resource allocation to obtain maximum total profit and emphasizes the importance of investment project selection and limited resource allocation. The basic steps and modules required for this process are described: the first step is to use the clustering analysis method (K-means) to cluster and screen the products with a high target profit in the market. In the second step, TOPSIS method is used in combination with the limited actual production conditions of the manufacturing enterprise to optimize the sequence of alternative and ideal solutions for the high-net profit products selected by the first step, and the good and bad solutions are sorted. The third step uses the dynamic programming model to optimize the allocation of resources for several target projects selected in the first two steps to obtain the total maximum profit. These 3 steps will be connected through MATLAB software series commands. In this paper, theoretical analysis and software programming simulation are carried out to determine the effectiveness and feasibility of the scheme. The advantage of this system is to efficiently screen out high-net profit investment and production projects from many products in the sales market, sort and select the final target projects in combination with the actual production conditions and capabilities of the manufacturing enterprises themselves and rationally allocate limited resources to obtain the maximum profit return of the total investment. This is an investment process with goals and plans, reasonable screening and allocation as well as maximum return on investment.

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