On the product selection and plant dimensioning problem under uncertainty



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Ortuño, M. T. and Alonso-Ayuso, A. and Escudero, L.F. and Garín, A. and Pérez, G. (2005) On the product selection and plant dimensioning problem under uncertainty. OMEGA - The International Journal of Management Science, 33 (4). 307 -318. ISSN 0305-0483

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Official URL: http://www.sciencedirect.com/science/article/pii/S0305048304000866


We present a two-stage full recourse model for strategic production planning under uncertainty, whose aim consists of determining product selection and plant dimensioning. The main uncertain parameters are the product price, demand and production cost. The benefit is given by the product net profit over the time horizon minus the investment depreciation and operation costs. The Value-at-Risk and the reaching probability are considered as risk measures in the objective function to be optimized as alternatives to the maximization of the expected benefit over the scenarios. The uncertainty is represented by a set of scenarios. The problem is formulated as a mixed 0-1 Deterministic Equivalent Model. The strategic decisions to be made in the first stage are represented by 0-1 variables. The tactical decisions to be made in the second stage are represented by continuous variables. An approach for problem solving based on a splitting variable mathematical representation via scenario is considered. The problem uses the Twin Node Family concept within the algorithmic framework known as Branch-and-Fix Coordination for satisfying the nonanticipativity constraints. Some computational experience is reported.

Item Type:Article
Uncontrolled Keywords:Production planning; Mean-risk; Stochastic programming; Mixed 0-1 programs; Splitting variable; Branch-and-fix coordination; Models; Programs
Subjects:Sciences > Computer science > Programming languages (Electronic computers)
ID Code:17416
Deposited On:13 Dec 2012 09:41
Last Modified:21 Jan 2021 10:34

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