Production planning in the animal nutrition industry under uncertainty

Diego Barreiros Augusto, Douglas Alem, Eli Angela Vitor Toso

Research output: Contribution to journalArticlepeer-review

Abstract

One of the greatest challenges of production planning in the animal nutrition industry is determining the amount of each product that should be produced during each period, given the perishability of the products, the manual execution of the setups and the need to adjust the production capacity in a stochastic demand environment that is characterized by the seasonality of the products and raw materials. This paper investigates an aggregate production planning problem in a plant that produces supplements for horses, cattle, pigs and poultry. To address this problem, we proposed an extension of the classical capacitated lot-sizing problem to incorporate decisions about lost sales and inherent uncertainties in production planning, such as demands, setup times and perishability. To generate solutions that are less sensitive to changes in scenarios, we also developed a risk-averse stochastic model with an absolute semi-deviation-based risk measure. An analysis of the expected value of perfect information and the value of the stochastic solution confirmed that the stochastic approach outperformed the deterministic approximations in handling uncertainty. Furthermore, the results indicated that it is possible to significantly reduce the variability of the second-stage costs without sacrificing the expected total cost.

Translated title of the contributionProduction planning in the animal nutrition industry under uncertainty
Original languagePortuguese
Pages (from-to)12-27
Number of pages16
JournalGestao e Producao
Volume26
Issue number1
DOIs
Publication statusPublished - 1 Jan 2015

Keywords

  • animal nutrition industry
  • capacitated lot-sizing problem with lost sales and perishability
  • risk management
  • two-stage stochastic programming

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