Production Planning Under Supply and Demand Uncertainty: A Stochastic Programming Approach

Julia L. Higle () and Karl G. Kempf ()
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Julia L. Higle: The Ohio State University
Karl G. Kempf: Intel Corporation

Chapter Chapter 14 in Stochastic Programming, 2010, pp 297-315 from Springer

Abstract: Abstract In this chapter, we introduce a stochastic programming model for production planning under uncertainty. Our model of uncertainty extends to supply via uncertainties in the production process, and demand via probabilistic descriptors of quantities and due dates even after orders have been received. In contrast to much of the existing literature, our models of uncertainty are dynamic, in that they reflect the evolution of supply through a multistage production process as well as volatility in customer orders as due dates approach. The resulting model is a multistage stochastic linear program that incorporates Markov chains within the probabilistic models.

Keywords: Production Facility; Order Quantity; Production Schedule; Production Stage; Markov Chain Model (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-1-4419-1642-6_14

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DOI: 10.1007/978-1-4419-1642-6_14

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