HEURISTIC FOR SINGLE LEVEL CAPACITATED PRODUCTION PLANNING PROBLEM WITH STOCHASTIC DEMAND AND CONSTANT SET-UP COST

This paper studies the single level capacitated production planning problem with set-up cost. First, it is assumed that the demand is deterministic. Based on reasonable assumptions, an analytical method is introduced such that gives optimal solution. Then, it is assumed that the demand is an arbitrary discrete random variable. Replacing the demand with its expected value can be transformed the stochastic model to deterministic model but in this paper, the better value, is proposed instead of expected value of demand.

Keywords:

production planning , stochastic demand , capacitated , setup cost