Int. J. of Intelligent Engineering Informatics   »   2014 Vol.2, No.2/3

 

 

Title: Stochastic modelling and optimisation of multi-plant capacity planning problem

 

Authors: Anoop Verma; Nagesh Shukla; Satish Tyagi; Nishikant Mishra

 

Addresses:
Department of Industrial and Systems Engineering, Wayne State University, Detroit, MI, 48201, USA
SMART Infrastructure Facility, University of Wollongong, Wollongong, NSW, 2522, Australia
Department of Industrial and Systems Engineering, Wayne State University, Detroit, MI, 48201, USA
School of Management and Business, Aberystwyth University, Rheidol Building, Aberystwyth, SY23 3AL, UK

 

Abstract: In this paper, the problem of capacity planning under risk from demand and price/cost uncertainty of the finished products is addressed. The deterministic model is extended into a two-stage stochastic model with fixed recourse by means of various expected levels of demand as random. A recourse penalty is also included in the objective for both shortage and surplus in the finished products. The model is analysed to quantify the risk using Markowitz mean-variance model.

 

Keywords: multi-plant capacity planning; stochastic optimisation; AMPL/CPLEX; Markowitz mean variance; stochastic modelling; uncertainty; recourse penalty; risk assessment.

 

DOI: 10.1504/IJIEI.2014.066209

 

Int. J. of Intelligent Engineering Informatics, 2014 Vol.2, No.2/3, pp.139 - 165

 

Submission date: 02 Aug 2013
Date of acceptance: 14 Apr 2014
Available online: 08 Dec 2014

 

 

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