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A two-stage linear production planning model with partial cooperation under stochastic demands

Author

Listed:
  • Ichiro Nishizaki

    (Hiroshima University)

  • Tomohiro Hayashida

    (Hiroshima University)

  • Shinya Sekizaki

    (Hiroshima University)

  • Kojiro Furumi

    (Hiroshima University)

Abstract

We consider two-stage stochastic linear production planning problems with partial cooperation including resource pooling, technology transfer and product transshipment, and employ a two-stage programming model with simple recourse to address uncertain demands. At the first stage, each manufacturer individually determines the production level according to its own technology and transferred technologies. After the demands are realized, multiple manufacturers jointly produce the products using pooled resources, and surplus products are transshipped to manufacturers with residual demands. Using the core solution concept from cooperative game theory, the additional profit obtained at the second stage is divided among all manufacturers. We develop a method to find a Nash equilibrium point such that the sum of the profits earned by all manufacturers is maximized. To demonstrate the validity of the proposed model, numerical examples are presented.

Suggested Citation

  • Ichiro Nishizaki & Tomohiro Hayashida & Shinya Sekizaki & Kojiro Furumi, 2023. "A two-stage linear production planning model with partial cooperation under stochastic demands," Annals of Operations Research, Springer, vol. 320(1), pages 293-324, January.
    • Handle: RePEc:spr:annopr:v:320:y:2023:i:1:d:10.1007_s10479-022-05056-w
    DOI: 10.1007/s10479-022-05056-w
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