TY - GEN
T1 - Robust optimization of a multi-period production planning problem under uncertaity
AU - Ben-Tal, A.
AU - Golany, B.
AU - Rozenblit, M.
PY - 2011
Y1 - 2011
N2 - We apply Robust Optimization (RO) to a periodic finite horizon production planning problem with uncertain demand that resides within an uncertainty set that follows a typical life-cycle pattern. We seek to determine the length of the profitable horizon and the production quantities within that horizon to maximize the total profit. When considering a linear costs setting, we show that the average performance of the adjustable and pure online RO methods is better than alternative methods. Moreover, these preferred methods achieved solutions that are surprisingly close to the perfect hindsight (PH) profit, i.e., the value that would have been obtained if it was possible to know the demand realizations in advance. When considering scenarios that involve fixed cost with polyhedral uncertainty sets, the RO formulation is a mixed integer model. For this setting, our simulation study shows that the average performance of the pure online RO follows the same trend as in the linear costs setting, namely close to the PH profit.
AB - We apply Robust Optimization (RO) to a periodic finite horizon production planning problem with uncertain demand that resides within an uncertainty set that follows a typical life-cycle pattern. We seek to determine the length of the profitable horizon and the production quantities within that horizon to maximize the total profit. When considering a linear costs setting, we show that the average performance of the adjustable and pure online RO methods is better than alternative methods. Moreover, these preferred methods achieved solutions that are surprisingly close to the perfect hindsight (PH) profit, i.e., the value that would have been obtained if it was possible to know the demand realizations in advance. When considering scenarios that involve fixed cost with polyhedral uncertainty sets, the RO formulation is a mixed integer model. For this setting, our simulation study shows that the average performance of the pure online RO follows the same trend as in the linear costs setting, namely close to the PH profit.
KW - Multi-period inventory control
KW - Optimization under uncertainty
KW - Robust optimization
UR - http://www.scopus.com/inward/record.url?scp=84923412622&partnerID=8YFLogxK
M3 - ???researchoutput.researchoutputtypes.contributiontobookanthology.conference???
AN - SCOPUS:84923412622
T3 - 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011 - Conference Proceedings
BT - 21st International Conference on Production Research
A2 - Krause, Tobias
A2 - Spath, Dieter
A2 - Ilg, Rolf
T2 - 21st International Conference on Production Research: Innovation in Product and Production, ICPR 2011
Y2 - 31 July 2011 through 4 August 2011
ER -