Application of robust optimization for a product portfolio problem using an invasive weed optimization algorithm

Abstract

Product portfolio optimization (PPO) is a strategic decision for many organizations. There are several technical methods for facilitating this decision. According to the reviewed studies, the implementation of the robust optimization approach and the invasive weed optimization (IWO) algorithm is the research gap in this field. The contribution of this paper is the development of the PPO problem with the help of the robust optimization approach and the multi-objective IWO algorithm. Considering the profit margin uncertainty in real-world investment decisions, the robust optimization approach is used to address this issue. To illustrate the real-world applicability of the model, it is implemented for dairy products of Pegah Golpayegan Company in Iran. The numerical results obtained from the IWO algorithm demonstrate the effectiveness of the proposed algorithm in tracing out the efficiency frontier of the product portfolio. The average risk of efficient frontier solutions in the deterministic model is about 0.4 and for the robust counterpart formulation is at least 0.5 per product. The efficient frontier solutions obtained from robust counterpart formulation demonstrate a more realistic risk level than the deterministic model. The comparisons between CPLEX, IWO and genetic algorithm (GA) shows that the performance of the IWO algorithm is much better than the older algorithms and can be considered as an alternative to algorithms, such as GA in product portfolio optimization problems.

A robust optimization model for sustainable and resilient closed-loop supply chain network design considering conditional value at risk

“…CVaR is measured by calculating the weighted average of the "extreme" losses in the tail of the distribution of possible returns, beyond the VaR cutoff point. Conditional value at risk is embedded in the portfolio optimization for effective risk management [19,41,13]. In addition, CVaR is more coherent, consistent, and conservative than other risk criteria.…”

“…In addition, constraints (8) to (10) indicate the sum of the produced pollutants in each center and the pollutants produced due to the goods transportation throughout the whole periods, for all the products and in all centers for each scenario. Constraints (11) to (13) represent the sum of the energies consumed in each center and the energy generated due to the goods transportation throughout the whole periods, for all the products, and in all centers for each scenario. Moreover, constraints (14) and (15) show the generated employment throughout the whole periods for each scenario.…”

A robust bi-objective multi-trip periodic capacitated arc routing problem for urban waste collection using a multi-objective invasive weed optimization

“…Hopefully, the plant with the best fitness is the nearest optimal solution. MOIWO is a multi-objective structure of the IWO algorithm that is presented first by Nikoofard et al (2012) and has been widely considered by researchers (Goli et al, 2019a(Goli et al, , 2019b. The steps of MOIWO for optimization of the proposed mathematical model are addressed in details as follows.…”

“…Figure2. Pseudo-code of proposed multi-objective invasive weed optimization algorithm(Goli et al, 2019a).…”

Layout Optimization in a Fitness Industry: An Application of QAP Formulation and Heuristic Approaches

“…Ghaffarinasab et al (2020) proposed a study focuses on p-hub median problem under hose and hybrid demand uncertainties and solution is represented with Tabu Search algorithm. In addition to aforementioned studies, a product portfolio problem (Goli et al, 2019), cell formation and production scheduling (Goli et al, 2021), demand prediction and disaster relief locating and routing problems (Goli and Malmir, 2020) are focused in literature for real life applications.…”