A multistage scenario optimisation procedure to plan annualised working hours under demand uncertainty.

Abstract

The annualisation of working hours (i.e., the irregular distribution of the total number of working hours over the course of a year) makes it possible to adapt production capacity to fluctuations in demand. The required capacity, which is an essential data for the optimal planning of working time, usually depends on several complex factors. Often, it is impossible to reliably predict the required capacity or it is unrealistic to adjust it to a probability distribution. In some cases, it is possible to determine a set of required capacity scenarios, each with a related probability. This paper presents a multistage stochastic optimisation model that provides a robust solution (i.e., feasible for any possible scenario) and minimises the expected total capacity shortage.