Modified Goal Programming Model for Limited Available Budget Allocation for Equipment Procurement under Inflation Condition

Main Article Content

O. O. Ojo
P. K. Farayibi
B. O. Akinnuli

Abstract

Equipment procurement budget is of a great challenge in manufacturing industries by reasons of its multi-objectives, insufficient funds, and inflation problems. Solutions were proffered to these problems by identifying the strategic decisions required in equipment procurement (machine, accessories, spare parts and miscellaneous costs). Procurement changes from year to year based on equipment industrial needs. Hence eleven (11) scenarios for procurement but this study focused on a scenario where all the decisions are needed for procurement. This problem is multi-objective decision problem where there is need for multi-objective decision tool for its solution, therefore a goal programming tool was adopted and improved by integrating inflation model into it to be able to solve inflation problems. International Brewery Ilesha, Nigeria was used as case study for the model’s application to evaluate its performance. The strategic decisions deviated above or positively by 0.4604, 4.1311 and 2.3760 for machines, spare-parts and miscellaneous costs respectively while accessories cost was not deviated. Therefore, the procurement cost for Machines, Accessories, Spare-parts and Miscellaneous costs would be (N 166,015,000; $ 461,152.77), (N 127,968,000; $ 355,466.67), (N 548,075,000; $ 1,522,430.56), (N 271,091,500; $ 753,031.94). US Dollar exchange rate was at N 360 to a Dollar as at the time of this research. This multi-criteria decision tool will find its application useful in small, medium and large scale industries that equipment procurement budget affects their production.v

Keywords:
Goal programming, available budget, equipment procurement, strategic decisions, inflation, multi-criteria model.

Article Details

How to Cite
Ojo, O. O., Farayibi, P. K., & Akinnuli, B. O. (2020). Modified Goal Programming Model for Limited Available Budget Allocation for Equipment Procurement under Inflation Condition. Advances in Research, 21(4), 25-35. https://doi.org/10.9734/air/2020/v21i430198
Section
Original Research Article

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