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Mathematical Problems in Engineering
Volume 2014, Article ID 901861, 10 pages
http://dx.doi.org/10.1155/2014/901861
Research Article

Robust Production Planning in Fashion Apparel Industry under Demand Uncertainty via Conditional Value at Risk

1Bremer Institut für Produktion und Logistik GmbH at the University of Bremen (BIBA), 28359 Bremen, Germany
2Department of Engineering, Faculty of Technology and Science, University of Agder, 4898 Grimstad, Norway

Received 31 January 2014; Accepted 25 March 2014; Published 29 April 2014

Academic Editor: Michael Freitag

Copyright © 2014 Abderrahim Ait-Alla et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper presents a mathematical model for robust production planning. The model helps fashion apparel suppliers in making decisions concerning allocation of production orders to different production plants characterized by different lead times and production costs, and in proper time scheduling and sequencing of these production orders. The model aims at optimizing these decisions concerning objectives of minimal production costs and minimal tardiness. It considers several factors such as the stochastic nature of customer demand, differences in production and transport costs and transport times between production plants in different regions. Finally, the model is applied to a case study. The results of numerical computations are presented. The implications of the model results on different fashion related product types and delivery strategies, as well as the model’s limitations and potentials for expansion, are discussed. Results indicate that the production planning model using conditional value at risk (CVaR) as the risk measure performs robustly and provides flexibility in decision analysis between different scenarios.