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.

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.

Copyright Owner

Elsevier B.V.

Language

en

File Format

application/pdf

Published Version

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