Article ID: | iaor20106140 |
Volume: | 179 |
Issue: | 1 |
Start Page Number: | 169 |
End Page Number: | 186 |
Publication Date: | Sep 2010 |
Journal: | Annals of Operations Research |
Authors: | Arenales Marcos Nereu, Alem Douglas Jos, Munari Pedro Augusto, Ferreira Paulo Augusto Valente |
Keywords: | programming: probabilistic |
This paper addresses the one-dimensional cutting stock problem when demand is a random variable. The problem is formulated as a two-stage stochastic nonlinear program with recourse. The first stage decision variables are the number of objects to be cut according to a cutting pattern. The second stage decision variables are the number of holding or backordering items due to the decisions made in the first stage. The problem's objective is to minimize the total expected cost incurred in both stages, due to waste and holding or backordering penalties. A Simplex-based method with column generation is proposed for solving a linear relaxation of the resulting optimization problem. The proposed method is evaluated by using two well-known measures of uncertainty effects in stochastic programming: the value of stochastic solution–