Transportation and Production Lot-size for Sugarcane under Uncertainty of Machine Capacity

Abstract

Abstract. The integrated transportation and production lot size problems is important effect to total cost of operation system for sugar factories. In this research, we formulate a mathematic model that combines these two problems as two stage stochastic programming model. In the first stage, we determine the lot size of transportation problem and allocate a fixed number of vehicles to transport sugarcane to the mill factory. Moreover, we consider an uncertainty of machine (mill) capacities. After machine (mill) capacities realized, in the second stage we determine the production lot size and make decision to hold units of sugarcane in front of mills based on discrete random variables of machine (mill) capacities. We investigate the model using a small size problem. The results show that the optimal solutions try to choose closest fields and lower holding cost per unit (at fields) to transport sugarcane to mill factory. We show the results of comparison of our model and the worst case model (full capacity). The results show that our model provides better efficiency than the results of the worst case model.