Campus Units
Industrial and Manufacturing Systems Engineering, Electrical and Computer Engineering
Document Type
Article
Publication Version
Submitted Manuscript
Publication Date
1-2018
Journal or Book Title
International Journal of Production Economics
Volume
195
First Page
96
Last Page
105
Research Focus Area(s)
Operations Research
DOI
10.1016/j.ijpe.2017.10.011
Abstract
We propose an inventory control model for an uncapacitated warehouse in a manufacturing facility under demand and lead time uncertainty. The objective is to make ordering decisions to minimize the total system cost. We introduce a two-stage tri-level optimization model with a rolling horizon to address the uncertain demand and lead time regardless of their underlying distributions. In addition, an exact algorithm is designed to solve the model. We compare this model in a case study with three decision-making strategies: optimistic, moderate, and pessimistic. Our computational results suggest that the performances of these models are either consistently inferior or highly sensitive to cost parameters (such as holding cost and shortage cost), whereas the new tri-level optimization model almost always results in the lowest total cost in all parameter settings.
Copyright Owner
Elsevier B.V.
Copyright Date
2017
Language
en
File Format
application/pdf
Recommended Citation
Rahdar, Mohammad; Wang, Lizhi; and Hu, Guiping, "A tri-level optimization model for inventory control with uncertain demand and lead time" (2018). Industrial and Manufacturing Systems Engineering Publications. 219.
https://lib.dr.iastate.edu/imse_pubs/219
Included in
Industrial Engineering Commons, Industrial Organization Commons, Systems Engineering Commons
Comments
This is a manuscript of an article published as Rahdar, Mohammad, Lizhi Wang, and Guiping Hu. "A tri-level optimization model for inventory control with uncertain demand and lead time." International Journal of Production Economics 195 (2018): 96-105. DOI: 10.1016/j.ijpe.2017.10.011. Posted with permission.