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

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  • Nasreddine Saadouli

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.

Suggested Citation

  • Nasreddine Saadouli, 2021. "Stochastic programming model for production planning with stochastic aggregate demand and spreadsheet-based solution heuristics," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 31(4), pages 117-127.
    • Handle: RePEc:wut:journl:v:31:y:2021:i:4:p:117-127:id:1604
    DOI: 10.37190/ord210406
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    References listed on IDEAS

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