Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 3

stochastic demand Related Abstracts

3 An Optimal Algorithm for Finding (R, Q) Policy in a Price-Dependent Order Quantity Inventory System with Soft Budget Constraint

Authors: S. Hamid Mirmohammadi, Shahrazad Tamjidzad


This paper is concerned with the single-item continuous review inventory system in which demand is stochastic and discrete. The budget consumed for purchasing the ordered items is not restricted but it incurs extra cost when exceeding specific value. The unit purchasing price depends on the quantity ordered under the all-units discounts cost structure. In many actual systems, the budget as a resource which is occupied by the purchased items is limited and the system is able to confront the resource shortage by charging more costs. Thus, considering the resource shortage costs as a part of system costs, especially when the amount of resource occupied by the purchased item is influenced by quantity discounts, is well motivated by practical concerns. In this paper, an optimization problem is formulated for finding the optimal (R, Q) policy, when the system is influenced by the budget limitation and a discount pricing simultaneously. Properties of the cost function are investigated and then an algorithm based on a one-dimensional search procedure is proposed for finding an optimal (R, Q) policy which minimizes the expected system costs .

Keywords: Q) policy, stochastic demand, backorders, limited resource, quantity discounts

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2 Optimal Production and Maintenance Policy for a Partially Observable Production System with Stochastic Demand

Authors: Viliam Makis, Leila Jafari


In this paper, the joint optimization of the economic manufacturing quantity (EMQ), safety stock level, and condition-based maintenance (CBM) is presented for a partially observable, deteriorating system subject to random failure. The demand is stochastic and it is described by a Poisson process. The stochastic model is developed and the optimization problem is formulated in the semi-Markov decision process framework. A modification of the policy iteration algorithm is developed to find the optimal policy. A numerical example is presented to compare the optimal policy with the policy considering zero safety stock.

Keywords: Condition-Based Maintenance, stochastic demand, safety stock, economic manufacturing quantity

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1 Heuristic Methods for the Capacitated Location-Allocation Problem with Stochastic Demand

Authors: Salinee Thumronglaohapun


The proper number and appropriate locations of service centers can save costs, raise revenue, and gain more satisfaction from customers. Establishing service centers is high-cost and difficult to relocate. In long-term planning periods, several factors may affect the service. One of the most critical factors is the uncertain demand for customers. The opened service centers need to capable of serving customers and making a profit, although the demand in each period is changed. In this work, the capacitated location-allocation problem with stochastic demand is considered. A mathematical model is formulated to determine suitable locations of service centers and their allocation to maximize total profit for multiple planning periods. Two heuristic methods, a local search and a genetic algorithm are used to solve this problem. For the local search, five different chances to choose each type of moves are applied. For the genetic algorithm, three different replacement strategies are considered. The results of applying each method to solve numerical examples are compared. Both methods reach the same best-found solution in most examples, but the genetic algorithm provides better solutions in some cases.

Keywords: Genetic Algorithm, local search, stochastic demand, location-allocation problem

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