Deterministic Approximations to Stochastic Production Problems

Gabriel R. Bitran and Horacio H. Yanasse
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Gabriel R. Bitran: Massachusetts Institute of Technology, Cambridge, Massachusetts
Horacio H. Yanasse: Instituto Nacional de Pesquisas Espaciais, Brazil

Operations Research, 1984, vol. 32, issue 5, 999-1018

Abstract: In this paper we consider deterministic approximations to a nonsequential stochastic production problem with setup costs. We show that, for the most commonly used probability distributions of the demands, the relative error bounds tend to be very small. We also consider a sequential stochastic problem, without setup costs, and discuss its relationship to the nonsequential case. Throughout the paper, we present limited computational results and indicate topics for further research.

Keywords: 333; and; 362; deterministic; approximation; to; production; problems (search for similar items in EconPapers)
Date: 1984
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Citations: View citations in EconPapers (12)

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