DOI: 10.36347/sjebm.2017.v04i11.007

Pages: 799-809

Businesses should make production plans to continue their commercial life and to improve their profitability. Linear programming is one of the basic approaches used in solving production planning problems. However, deterministic structure of linear programming cannot express the randomness of variable coefficients that exists in many real production problems. In production planning, coefficients of variables and constraints such as prices or demand may not be in deterministic structure. In such cases, linear programming model gives inadequate results for the problem. Under uncertainty, stochastic programming approach comes to the fore as a method for solving production planning problems. It is possible to add uncertainty into to the model in decision-making process by using stochastic programming models. In solving phase of stochastic programming the basic approach is, converting the probabilistic structure of the problem into deterministic form and solving by mathematical methods.