We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is Stochastic Programming?

Mary McMahon
By
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Stochastic programming handles complex mathematical optimization questions where unknown variables create a number of possible solutions. This may involve taking a model through a series of stages, each of which can be influenced by separate variables. Mathematicians can apply this to problems related to decision making, resource allocation, and similar activities. It is also a subject of academic study, where researchers work on the development of new and more effective stochastic programming models to apply to real-world situations.

Optimization problems can become extremely complex. In more basic forms, the variables are all known, which makes it possible to run them through an equation to figure out the most appropriate solution. This is not usually possible with a situation where the parameters are less certain, and unknown variables could have an influence on the outcome. Stochastic programmers rely on a probability distribution to estimate the range of the variables and apply this to the equation.

Common examples can come up in mathematical modeling of events in the natural environment. When butterflies lay eggs, for example, they want to optimize the chances of hatching and developing into larvae and then adult butterflies. A stochastic programming model can provide information about the best series of decisions the butterfly could make. Variables might include predation, temperature changes, and other issues that inhibit hatching or kill the larvae off before they reach adulthood. The mathematician can work through a series of stages to optimize the problem.

Decisions at each stage can cut off or open up decisions at the next. Stochastic programming needs to be flexible to reach the optimal solution, while still imposing some order on the decisions to make it possible to quantify them in a math problem. The level of complexity can depend on the nature of the problem; some are simply laid out in two stages, while others may involve multiples. For each stage, it is possible to determine the optimal solution, and to consider the impact it will have on decision making along the line.

Researchers can use this tool in a variety of ways, from analyzing animal behavior to looking at the processes behind decisions in the corporate world. It can also be used for mathematical modeling to support decisions in settings like business. Securities traders, for example, may consider stochastic programming as one of the tools available to explore optimal solutions to problems. Analysts can perform calculations of this nature or may use software programs that allow them to set problems up automatically and run them through a series of possible scenarios.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGeek researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.