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


Rossi R. , TARIM Ş. A. , HNİCH B., Prestwich S.

INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS, vol.127, no.1, pp.180-189, 2010 (Journal Indexed in SCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 127 Issue: 1
  • Publication Date: 2010
  • Doi Number: 10.1016/j.ijpe.2010.05.011
  • Title of Journal : INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS
  • Page Numbers: pp.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 (R"S") is modeled, where R" is the nth replenishment cycle length and S" 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. (C) 2010 Elsevier B.V. All rights reserved.