Title: A two-level interior-point decomposition algorithm for multi-stage stochastic capacity planning and technology acquisition

Authors: Lila Rasekh, Jacques Desrosiers

Addresses: HEC Montreal, 3000 Chemin de la Cote-Sainte-Catherine, Montreal, Quebec H3T 2A7, Canada. ' HEC Montreal, 3000 Chemin de la Cote-Sainte-Catherine, Montreal, Quebec H3T 2A7, Canada, H3T 2A7

Abstract: Manufacturing flexibility is recognised as one of the key strategies to address uncertain future products demand. Therefore, a growing need exists to investigate the strategic aspect of flexibility. To capture the different aspects of market flexibility in the face of this dynamic demand, this paper focuses on the role of product, volume, and expansion flexibility in the context of the multi-stage stochastic program. Moreover, we implement a two-level, interior-point decomposition algorithm based on the Analytic Center Cutting Plane Method (ACCPM) to solve the model. The central prices obtained by the ACCPM provides a fast convergence and promising computational results in terms of the number of iterations.

Keywords: column generation; interior point method; ACCPM; analytic centre cutting plane method; stochastic optimisation; flexible manufacturing; decomposition algorithms; capacity planning; technology acquisition; manufacturing flexibility.

DOI: 10.1504/IJMOR.2011.040027

International Journal of Mathematics in Operational Research, 2011 Vol.3 No.3, pp.280 - 294

Published online: 12 Feb 2015 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article