A chance constrained programming model is developed to arrive at an optimal long-range design for a manufacturing facility. The determination of process capacities, the amounts of the various types of equipment, and the time-phasing of the acquisition constitutes facility design in the study. The expected cost is minimised, subject to probabilistic constraints which express the risk associated with demand forecasts. The model is solved by decomposing the deterministic equivalent. The structure of the model enables the solution to be obtained with one iteration. The algorithm is incorporated into a computer code which is applied to the design of a tire plant. The methodology has the potential of extendability to nonmanufacturing systems.
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