Planning working time accounts under demand uncertainty

Working time accounts (WTAs) are employer-oriented flexibility systems that have been applied in industry but could be used far more. WTAs enable capacity to be adapted to fluctuations in demand. The required capacity, which is needed to plan WTAs, usually depends on several factors. It is often impossible to reliably predict the required capacity or unrealistic to adjust it to a probability distribution. In some cases, a set of required-capacity scenarios can be determined, each with a related probability. This paper presents a multistage stochastic optimisation model that is robust (i.e., provides a solution that is feasible for any possible scenario) and minimises the expected total cost (which includes the cost of overtime and the cost of the capacity shortage). (C) 2010 Elsevier Ltd. All rights reserved.