Abstract: In recent years, theory of constraints (TOC) has emerged as an effective management philosophy for solving the product mix decision problem with the aim of profit maximization by considering the bottleneck in traditional as well as modern manufacturing plants. One of the key components of TOC application is to enumerate quantity of the various products to be produced keeping in view the system constraints and this is termed as TOC product mix decision problem. It is well know computationally complex problem and thus warrants the application of heuristics technique or AI based optimization tools get to achieve near optimal solution in real time. In this research a hybrid algorithm named tabu-simulated annealing is proposed. The proposed algorithm exploits the beauty of tabu search and SA and ensures the convergence at faster rate.
Keywords: Product mix, perturbation, tabu-list, cooling rate, and aspiration