Chance-constrained formulations in rolling horizon production planning: an experimental study

Po-Chen Lin and Reha Uzsoy

International Journal of Production Research, 2016, vol. 54, issue 13, 3927-3942

Abstract: Rolling horizon procedures, where an infinite horizon problem is approximated by the solution to a sequence of finite horizon problems, are common in production planning practice and research. However, these procedures also lead to frequent changes in planned release and production quantities, a phenomenon referred to as nervousness. We examine the performance of two chance-constrained production planning models developed for systems with stochastic demand in a rolling horizon environment, and find that these formulations significantly reduce planned release changes (nervousness) while also improving cost and service-level performance.

Date: 2016
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DOI: 10.1080/00207543.2016.1165356

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