A stochastic programming process model for investment planning (Q579135)

The usual programming formulation of an industrial process model is extended to incorporate parameters and demand uncertainties by modeling it as a stochastic linear program with simple recourse (SLPR). The SLPR is solved using the less restrictive assumptions that only the mean and variance of the stochastic entities (but not their distribution) are known. An algorithm is derived to solve the particular form of SLPR. The methodology is applied to a study of the steel industry in India as a novel way of modeling investment and economies-of-scale.