A multistage stochastic programming model for the New Zealand dairy industry
This paper presents an application of multistage stochastic programming to a production planning problem for Fonterra, a leading company in the New Zealand dairy industry, taking into account uncertain milk supply, priceâdemand curves and contracting. We describe a model for Fonterra's supply chain, and a model for uncertain milk supply. We then present a multistage stochastic quadratic programming model and a decomposition algorithm to compute an optimal sales policy, which is tested in simulation against a deterministic policy.
Year of publication: |
2011
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Authors: | Guan, Z. ; Philpott, A.B. |
Published in: |
International Journal of Production Economics. - Elsevier, ISSN 0925-5273. - Vol. 134.2011, 2, p. 289-299
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Publisher: |
Elsevier |
Keywords: | Multistage stochastic quadratic programming Price-demand curve Sampling Uncertain supply Decomposition |
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