Production Planning Under Supply and Demand Uncertainty: A Stochastic Programming Approach

Part of the International Series in Operations Research & Management Science book series (ISOR, volume 150)


In this chapter, we introduce a stochastic programming model for production planning under uncertainty. Our model of uncertainty extends to supply via uncertainties in the production process, and demand via probabilistic descriptors of quantities and due dates even after orders have been received. In contrast to much of the existing literature, our models of uncertainty are dynamic, in that they reflect the evolution of supply through a multistage production process as well as volatility in customer orders as due dates approach. The resulting model is a multistage stochastic linear program that incorporates Markov chains within the probabilistic models.


Production Facility Order Quantity Production Schedule Production Stage Markov Chain Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



This work was supported by Grant No. DMS 04-00085 from The National Science Foundation.


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© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Department of Integrated Systems EngineeringThe Ohio State UniversityColumbusUSA
  2. 2.Decision Technologies GroupIntel CorporationChandlerUSA

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