Determining the production order of two seasonal products under capacity constraint

In this paper the production sequence of two seasonal products is analyzed when the parameters of demand forecasts are not certainly known in advance. The accuracy of these forecasts improves as the season is approached, however, the expected demand remains a probability variable when production decisions are made on the production order, and volume of the products at the beginning of the planning horizon. The novel side of the approach applied in this paper is a capacity constraint, inserted into the analyses in which the production volume depends on a probability variable, namely on the expected demand.