Open AccessStochastic programming model for production planning with stochastic aggregate demand and spreadsheet-based solution heuristics
Author(s) -
Nasreddine Saadouli
Publication year - 2021
Publication title -
badania operacyjne i decyzje/operations research and decisions
Language(s) - English
Resource type - Journals
eISSN - 2081-8858
pISSN - 1230-1868
DOI - 10.37190/ord210406
Subject(s) - heuristics , aggregate planning , computer science , mathematical optimization , aggregate (composite) , production planning , production (economics) , stochastic programming , heuristic , software , key (lock) , operations research , artificial intelligence , mathematics , economics , materials science , computer security , composite material , macroeconomics , programming language
The production planning problem with stochastic aggregate demand is considered in the article. 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.