A stochastic linear programming model for a multi-stage production system with random yields

A stochastic linear programming model for a multi-stage production system with random yields

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Article ID: iaor19983020
Country: South Korea
Volume: 22
Issue: 1
Start Page Number: 51
End Page Number: 58
Publication Date: Mar 1997
Journal: Journal of the Korean ORMS Society
Authors: ,
Keywords: production, programming: probabilistic, programming: dynamic
Abstract:

In this paper, we propose a stochastic LP model for determining an optimal input quantity in a single-product multi-stage production system with random yields. Due to the random yields in our model, each stage of the production system can result in defective items, which can be re-processed or scrapped at certain costs. We assume that the random yield at each stage follows an independent discrete empirical distribution. Compared to dynamic programming models that prevail in the literature, our model can easily handle problems of larger sizes.

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