Production Planning Under Demand Uncertainty: A Budgeted Uncertainty Approach

The paper deals with a version of the capacitated single-item lot sizing problem with backordering under uncertainty. The interval representation of uncertain cumulative demands is considered. Two its variants: the discrete budgeted uncertainty and the continuous budgeted uncertainty, are examined. In order to choose a robust production plan, for the problem under consideration, that hedges against the uncertainty the well-known minmax criterion is adopted. Polynomial and pseudopolynomial methods for finding a robust production plan, respectively, under the discrete and continuous budgeted uncertainty are proposed.