The eclectic model for stochastic dynamic production cycling problem

The production system to process multi-item products with a single machine by turns to meet time-varying stochastic demand in the finite planning horizon consisting of discrete periods is considered and a new optimization model and its calculation procedure are proposed. The problem is to determine the items and the production quantities to minimize the expectation of production costs, inventory-holding costs, shortage costs and setup costs. An eclectic model is built, where the items are treated as variables to be determined at the beginning of the planning horizon and the production quantities are determined as a policy. A calculation procedure using the branch and bound method is developed. Meaning and validity of the proposed model are clarified by a numerical example.