Computing the non-stationary replenishment cycle inventory policy under stochastic supplier lead-times

Roberto Rossi, S. Armagan Tarim, Brahim Hnich and Steven Prestwich

International Journal of Production Economics, 2010, vol. 127, issue 1, 180-189

Abstract: In this paper we address the general multi-period production/inventory problem with non-stationary stochastic demand and supplier lead-time under service level constraints. A replenishment cycle policy (Rn,Sn) is modeled, where Rn is the nth replenishment cycle length and Sn is the respective order-up-to-level. We propose a stochastic constraint programming approach for computing the optimal policy parameters. In order to do so, a dedicated global chance-constraint and the respective filtering algorithm that enforce the required service level are presented. Our numerical examples show that a stochastic supplier lead-time significantly affects policy parameters with respect to the case in which the lead-time is assumed to be deterministic or absent.

Keywords: Inventory; control; Demand; uncertainty; Supplier; lead-time; uncertainty; Stochastic; constraint; programming; Global; chance-constraints (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:127:y:2010:i:1:p:180-189

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