A Global Chance-Constraint for Stochastic Inventory Systems Under Service Level Constraints

Roberto Rossi, S Armagan Tarim, Brahim Hnich, Steven Pestwich

Research output: Contribution to journalArticlepeer-review

Abstract

We consider a class of production/inventory control problems that has a single product and a single stocking location, for which a stochastic demand with a known non-stationary probability distribution is given. Under the widely-known replenishment cycle policy the problem of computing policy parameters under service level constraints has been modeled using various techniques. Tarim and Kingsman introduced a modeling strategy that constitutes the state-of-the-art approach for solving this problem. In this paper we identify two sources of approximation in Tarim and Kingsman’s model and we propose an exact stochastic constraint programming approach. We build our approach on a novel concept, global chance-constraints, which we introduce in this paper. Solutions provided by our exact approach are employed to analyze the accuracy of the model developed by Tarim and Kingsman.
Original languageEnglish
Pages (from-to)490-517
Number of pages28
JournalConstraints
Volume13
Issue number4
Early online date16 Feb 2008
DOIs
Publication statusPublished - Dec 2008

Keywords

  • Global chance-constraints
  • Stochastic inventory control
  • Non-stationary (R,S) policy
  • Uncertainty

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