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A Lagrangian Relaxation Approach for Production Planning With Demand Uncertainty

Haoxun Chen 1 
Abstract : A production planning problem with stochastic final demands is considered in this paper. The problem is to determine over a given time horizon the production quantity of each intermediate/final product at each facility of finite capacity so that a system-wide total cost is minimized while meeting given service level requirements for the final products. After reformulating the stochastic problem as a multi-item, multi-stage capacitated lot-sizing problem with a nonlinear cost function using deterministic equivalence, it is solved by using a Lagrangian relaxation approach enhanced with a local search based on a modified simplex algorithm. Numerical experiments show that the approach can find high quality near-optimal solutions for randomly generated problems of realistic sizes in a computation time much shorter than that of an exact algorithm.
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Submitted on : Thursday, February 13, 2020 - 11:03:43 AM
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Haoxun Chen. A Lagrangian Relaxation Approach for Production Planning With Demand Uncertainty. 2006 International Conference on Service Systems and Service Management, Oct 2006, Troyes, France. pp.1020-1025, ⟨10.1109/ICSSSM.2006.320648⟩. ⟨hal-02477139⟩



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