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Stochastic programming model for production planning with stochastic aggregate demand and spreadsheet-based solution heuristics

Nasreddine Saadouli ()

Operations Research and Decisions, 2021, vol. 31, issue 4, 117-127

Abstract: By discretising the stochastic demand, a deterministic nonlinear programming formulation is developed. Then, a hybrid simulation-optimisation heuristic that capitalises on the nature of the problem is designed. The outcome is an evaluation problem that is efficiently solved using a spreadsheet model. The main contribution of the paper is providing production managers with a tractable formulation of the production planning problem in a stochastic environment and an efficient solution scheme. A key benefit of this approach is that it provides quick near-optimal solutions without requiring in-depth knowledge or significant investments in optimisation techniques and software.

Keywords: production planning; stochastic programming; efficient algorithm; decision-making (search for similar items in EconPapers)
Date: 2021
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DOI: 10.37190/ord210406

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