The Value of Stochastic Modeling in Two-Stage Stochastic Programs with Cost Uncertainty

@article{Delage2012TheVO,
  title={The Value of Stochastic Modeling in Two-Stage Stochastic Programs with Cost Uncertainty},
  author={Erick Delage and Sharon Arroyo and Yinyu Ye},
  journal={Operations Research},
  year={2012},
  volume={62},
  pages={1377-1393}
}
Although stochastic programming is probably the most effective framework for handling decision problems that involve uncertain variables, it is always a costly task to formulate the stochastic model that accurately embodies our knowledge of these variables. In practice, this might require one to collect a large amount of observations, to consult with experts of the specialized field of practice, or to make simplifying assumptions about the underlying system. When none of these options seem… CONTINUE READING

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