Hadi Mokhtari - Associate Professor, Department of Industrial Engineering, Faculty of Engineering,University of Kashan, Kashan, Iran
Ali Salmasnia - Associate Professor, Department of Industrial Engineering, Faculty of Technology and Engineering, University of Qom, Qom, Iran
ali fallahi - MSc Student, Department of Industrial Engineering, Sharif University of Technology, Tehran, Iran

This paper designs a Scenario analysis approach to determine the joint production policy for two products under possible substitution. The Scenario analysis is designed to improve decision making by considering possible outcomes and their implications. The traditional multi-products production models assume that there is no possible substitution between products. However, in real-world cases, there are many substitutable products where substitution may occur in the event of a product stock-out. The proposed model optimizes production quantities for two products under substitution with the aim of minimizing the total cost of inventory system, including setup and holding costs, subject to a resource constraint. To analyze the problem, four special Scenarios are derived and discussed in detail. Furthermore, the total cost functions are derived for each Scenario separately, and then a solution procedure is suggested based on the Scenarios developed. The numerical examples are implemented, and the results are discussed in detail.

Scenario Analysis, Production-Inventory Systems, Substitutable Products, Joint Production Policy