Production planning under seasonal and uncertain demand

In the agrochemical industry, tactical production planning is done using uncertain sales forecasts as demand can depend on unpredictable parameters such as the meteorological conditions of the next growing season. In order to deal with uncertainty in the forecasts, it is common in practice to implement a production plan in a rolling horizon fashion. However, frequent updates of demand forecasts may lead to high nervousness: important variations in the quantities planned at successive production plans. Due to tight capacity constraints, long lead-times and overall low flexibility of the processes, it may be expensive, or even impossible, to frequently adjust the campaign plan to include more recent forecasts. In other words, the adjustment of the production plan may sometimes not be worth the nervousness cost it induces. This may especially be the case at the peak of the selling season, when the demand can be forecast most accurately but the production is already running at full capacity. This research project investigates strategy to design a campaign plan that is both robust to uncertainty in the sense of maximising customer satisfaction, and at the same time guarantees a certain level of stability in successive plans. Based on a detailed analysis of the historical data of our industrial partner, we investigate the optimal production policy in the face of seasonal demand and especially focus on the pre-season or in-season production decision.     «

In the agrochemical industry, tactical production planning is done using uncertain sales forecasts as demand can depend on unpredictable parameters such as the meteorological conditions of the next growing season. In order to deal with uncertainty in the forecasts, it is common in practice to implement a production plan in a rolling horizon fashion. However, frequent updates of demand forecasts may lead to high nervousness: important variations in the quantities planned at successive production...     »