Research on capacity planning under stochastic production and uncertain demand

To study the stochastic factors effect on capacity planning decision, a stochastic capacity planning model is built, which includes stochastic factors of marketing demand and production. Object function of the model is to minimize the cost. Using chance constrained programming method an equal certain model is produced for the stochastic production. And, based on two-phase model, the equal certain restriction of uncertain marketing demand is built too. So, the stochastic capacity planning model is transformed to a certain model. At last, an algorithm is produced, which uses Genetic Algorithm (GA) to optimize the capacity decision variables and Primal-Dual method to deal with Quadratic Constraints Programming of product mix decision. The numerical example demonstrates that the model and the algorithm are effective.