Hierarchical approach for production planning and scheduling under uncertainty

In this paper, the simultaneous solution of production planning and scheduling problem is addressed through a hierarchical framework. The planning problem aggregates orders in the planning period and considers uncertainty utilizing a multi-stage stochastic programming formulation where three stages are considered with increasing level of uncertainty. The planning model includes material balances and time horizon constraints which involve a sequence factor to reflect the recipe complexity. Using a rolling horizon strategy, the production for the current stage is provided to the scheduling problem, which is solved using a continuous-time formulation. An iterative framework is developed to converge the planning and scheduling results before solving for the next period. The proposed approach is illustrated with a planning case study.