On solving stochastic production planning problem

In this paper aggregate production planning problem with random demand and production failure is modeled as the stochastic programming with recourse. A sampling approximation method is proposed to overcome computational difficulty of the-model. A good characteristic of the approximation method is that the size of the problem is independent of the number of stochastic sources. Experimental results indicate that the solution to the stochastic production planning problem converges rapidly as the sample size increases.