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Risk-averse two-stage stochastic programming for assembly line reconfiguration with dynamic lot sizes

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  • Li, Yuchen
  • Liu, Ming
  • Saldanha-da-Gama, Francisco
  • Yang, Zaoli

Abstract

In this paper, a comprehensive optimization problem is developed for a composite of an assembly line reconfiguration problem with multiple lines and a capacitated lot-sizing problem. Multiple products are considered, whose demand is uncertain and is dynamically forecasted. The production planner is assumed to be risk-averse, and decisions are made contingent upon the risk preference. To model the problem, a stochastic program with two stages is utilized. A solution approach is devised using a divide-and-conquer algorithm, which incorporates a set of valid inequalities. The effectiveness and efficiency of the proposed solution approach are assessed through a series of computational tests. Finally, a case study focusing on an engine production process is presented, leading to the derivation of several valuable insights.

Suggested Citation

  • Li, Yuchen & Liu, Ming & Saldanha-da-Gama, Francisco & Yang, Zaoli, 2024. "Risk-averse two-stage stochastic programming for assembly line reconfiguration with dynamic lot sizes," Omega, Elsevier, vol. 127(C).
    • Handle: RePEc:eee:jomega:v:127:y:2024:i:c:s0305048324000598
    DOI: 10.1016/j.omega.2024.103092
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