Adaptive robust optimization for lot-sizing under yield uncertainty

Paula Metzker Soares, Simon Thevenin, Yossiri Adulyasak and Alexandre Dolgui

European Journal of Operational Research, 2024, vol. 313, issue 2, 513-526

Abstract: In manufacturing environments, uncertain production yield directly impacts the quality and feasibility of the production planning decisions. This paper investigates the use of adaptive robust optimization to hedge against uncertain yield when determining a production plan, and to react properly when updated information unfolds. We first derive a myopic adaptive robust policy for the inventory management problem, a special case of the lot-sizing problem where the setup and the production costs are omitted. We show that the policy is optimal under mild assumptions. Second, we address a multi-period single-item lot-sizing problem with a backorder and uncertain yield via adaptive robust optimization. We formulate an adaptive robust model based on the budgeted uncertainty set, where we exploit a linear approximation to transform the quadratic constraints into a mixed-integer linear program. We also propose a column and constraint generation algorithm to solve the adaptive model exactly. Finally, we demonstrate the performances of the proposed approaches and the value of the adaptive robust solutions through extensive numerical experiments.

Keywords: Combinatorial optimization; Lot-sizing; Yield uncertainty; Adjustable robust optimization; Column and constraint generation (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221723006641
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:313:y:2024:i:2:p:513-526

DOI: 10.1016/j.ejor.2023.08.036

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().