Analysis of uncontrollable supply effects on a co-production demand-driven wood remanufacturing mill with alternative processes

Dealing with Stochasticity in Wood Remanufacturing Operations Planning

“…The case under study transforms lumber into bed frame components. It is the same case study of Rafiei et al (Rafiei et al, 2014;Rafiei et al, 2015;Rafiei et al, 2016), which will be later used as a benchmarking reference for the new stochastic models developed herein for the same industry sector and for a proof-of-concept and comparative analysis in Section 4.…”

“…Alternative Production planning is not simple in this context, particularly when demand varies considerably. In the literature, first papers dealing with planning approaches for this industrial field were Rafiei et al (Rafiei et al, 2014;Rafiei et al, 2015;Rafiei et al, 2016); in which a series of reactive planning approaches is developed and evaluated, making use of complete re-planning approach following a periodic policy and rolling horizons. This kind of reactive planning approaches can provide good results when demands are unpredictable.…”

“…In this context, considering that the demand probability distribution is known, this paper develops a predictive (rather than reactive) approach based on multi-stage stochastic programming. The new proposed models are submitted to a comparative analysis, benchmarking the existing reactive approach developed in Rafiei et al (Rafiei et al, 2014;Rafiei et al, 2015;Rafiei et al, 2016). An important result consists in determining the number of stages for which the multi-stage programs provide better planning than the re-planning approach.…”

“…Despite the fact that secondary wood processing industries have brought massive social and economic benefits since the early 1980s (Kozak et al, 2003), companies in this sector still face critical challenges in production planning under dynamic demand. More recently, some studies consider production planning problems in the wood remanufacturing with this dynamic aspect in mind (Rafiei et al, 2014;Rafiei et al, 2015;Rafiei et al, 2016). This literature review indicates that, despite the existence of several works in the field of production planning under uncertain demand through stochastic programming, it can still be considered an developing field comprising diverse uncluttered research questions (Rönnqvist et al, 2015).…”