Multi-Echelon Production Scheduling When Demand is Stochastic

Jack F. William
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Jack F. William: The University of Wisconsin-Milwaukee

Management Science, 1974, vol. 20, issue 9, 1253-1263

Abstract: This paper presents a dynamic programming algorithm for determining optimal production in a series type multi-echelon inventory system with stochastic final product demand. Setup costs at individual facilities are permitted. For the case where it is physically possible (but not required) for a product unit to pass through all the facilities within a single time period, a second dynamic programming algorithm is presented which can be used in conjunction with the first to substantially decrease computation time. The model can also be readily specialized to the case of deterministic demand and permits a larger class of cost functions than existing deterministic multi-echelon models.

Date: 1974
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:20:y:1974:i:9:p:1253-1263

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