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A robust optimization model for stochastic aggregate production planning

A robust optimization model for stochastic aggregate production planning
A robust optimization model for stochastic aggregate production planning
The aggregate production planning (APP) problem considers the medium-term production loading plans subject to certain restrictions such as production capacity and workforce level. It is not uncommon for management to often encounter uncertainty and noisy data, in which the variables or parameters are stochastic. In this paper, a robust optimization model is developed to solve the aggregate production planning problems in an environment of uncertainty in which the production cost, labour cost, inventory cost, and hiring and layoff cost are minimized. By adjusting penalty parameters, decision-makers can determine an optimal medium-term production strategy including production loading plan and workforce level while considering different economic growth scenarios. Numerical results demonstrate the robustness and effectiveness of the proposed model. The proposed model is realistic for dealing with uncertain economic conditions. The analysis of the tradeoff between solution robustness and model robustness is also presented.
aggregate production planning, robustness, stochastic programming
0953-7287
502-514
Leung, Stephen C. H.
0611a455-23c2-4a75-a197-adb3e3741957
Wu, Yue
e279101b-b392-45c4-b894-187e2ded6a5c
Leung, Stephen C. H.
0611a455-23c2-4a75-a197-adb3e3741957
Wu, Yue
e279101b-b392-45c4-b894-187e2ded6a5c

Leung, Stephen C. H. and Wu, Yue (2004) A robust optimization model for stochastic aggregate production planning. Production Planning & Control, 15 (5), 502-514. (doi:10.1080/09537280410001724287).

Record type: Article

Abstract

The aggregate production planning (APP) problem considers the medium-term production loading plans subject to certain restrictions such as production capacity and workforce level. It is not uncommon for management to often encounter uncertainty and noisy data, in which the variables or parameters are stochastic. In this paper, a robust optimization model is developed to solve the aggregate production planning problems in an environment of uncertainty in which the production cost, labour cost, inventory cost, and hiring and layoff cost are minimized. By adjusting penalty parameters, decision-makers can determine an optimal medium-term production strategy including production loading plan and workforce level while considering different economic growth scenarios. Numerical results demonstrate the robustness and effectiveness of the proposed model. The proposed model is realistic for dealing with uncertain economic conditions. The analysis of the tradeoff between solution robustness and model robustness is also presented.

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More information

Published date: 2004
Keywords: aggregate production planning, robustness, stochastic programming

Identifiers

Local EPrints ID: 36311
URI: http://eprints.soton.ac.uk/id/eprint/36311
ISSN: 0953-7287
PURE UUID: 9c372612-6d4d-404a-821d-5173258ac35e
ORCID for Yue Wu: ORCID iD orcid.org/0000-0002-1881-6003

Catalogue record

Date deposited: 23 May 2006
Last modified: 16 Mar 2024 03:39

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Contributors

Author: Stephen C. H. Leung
Author: Yue Wu ORCID iD

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