Abstract
This study deals with a hierarchical planning system that is used for planning of a single-stage manufacturing system. We consider two decision levels, aggregate and detailed planning, and formulate a model for evaluation of aggregate plans and optimal disaggregation in case of independent stochastic demand. It is shown how the optimal solution can be obtained with the aid of a dynamic programming algorithm. Furthermore, we give conditions that will guarantee optimality of a simple intuitive disaggregation rule.
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