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An Optimization Based Decision Support System for Strategic Planning in Process Industries: The Case of a Pharmaceutical Company

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Real-World Decision Support Systems

Part of the book series: Integrated Series in Information Systems ((ISIS,volume 37))

Abstract

In this research, we present the design, development, implementation and testing of a model-based DSS for strategic planning in process industries. This DSS was first developed as a single period model, later it was extended to multiple period planning and then multiple scenario planning. We demonstrate how a complex process industry like the pharmaceutical industry can be modelled using stochastic linear programming (SLP). We describe how a generic, user friendly, menu driven model-based DSS can be designed and developed. We also demonstrate that such systems can be used by managers with no or little knowledge of OR/MS. The DSS is tested using real data from a pharmaceutical company. We demonstrate the impact of modeling uncertainty using SLP. We conduct a set of optimization experiments in order to demonstrate the impact of stochastic optimization. The impact of the optimization and modeling uncertainty is measured in terms of a Value of Stochastic Solution (VSS). The successful testing of the DSS with real data from a pharmaceutical company demonstrates a potential bottom line impact of 5. 36 %, equivalent to USD 1. 26 million. We discuss the characteristics of a good model-based DSS. We present the key features of our DSS in this context. We also discuss the reasons behind the failures of several DSSs in practice. We conclude the chapter by sharing the lessons that we learnt in our journey of development and use of the proposed DSS.

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Author information

Authors and Affiliations

  1. Management Development Institute, Gurgaon, 122001, Haryana, India

    Narain Gupta

  2. Indian Institute of Management, Ahmedabad, Ahmedabad, 380015, India

    Goutam Dutta

Authors
  1. Narain Gupta
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  2. Goutam Dutta
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Correspondence to Narain Gupta .

Editor information

Editors and Affiliations

  1. Dept. of Business Administration, University of Macedonia, Thessaloniki, Greece

    Jason Papathanasiou

  2. Dept. of Chemical Engineering, Carnegie Mellon University, Pittsburgh, Pennsylvania, USA

    Nikolaos Ploskas

  3. Dept. of Business Administration, University of Namur, Namur, Belgium

    Isabelle Linden

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Gupta, N., Dutta, G. (2016). An Optimization Based Decision Support System for Strategic Planning in Process Industries: The Case of a Pharmaceutical Company. In: Papathanasiou, J., Ploskas, N., Linden, I. (eds) Real-World Decision Support Systems. Integrated Series in Information Systems, vol 37. Springer, Cham. https://doi.org/10.1007/978-3-319-43916-7_8

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  • DOI: https://doi.org/10.1007/978-3-319-43916-7_8

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-43915-0

  • Online ISBN: 978-3-319-43916-7

  • eBook Packages: Computer ScienceComputer Science (R0)

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