A characterization of optimal base-stock levels for a multistage serial supply chain
(2016) In Naval Research Logistics 63(1). p.32-46- Abstract
In this article, we present a multistage model to optimize inventory control decisions under stochastic demand and continuous review. We first formulate the general problem for continuous stages and use a decomposition solution approach: since it is never optimal to let orders cross, the general problem can be broken into a set of single-unit subproblems that can be solved in a sequential fashion. These subproblems are optimal control problems for which a differential equation must be solved. This can be done easily by recursively identifying coefficients and performing a line search. The methodology is then extended to a discrete number of stages and allows us to compute the optimal solution in an efficient manner, with a competitive... (More)
In this article, we present a multistage model to optimize inventory control decisions under stochastic demand and continuous review. We first formulate the general problem for continuous stages and use a decomposition solution approach: since it is never optimal to let orders cross, the general problem can be broken into a set of single-unit subproblems that can be solved in a sequential fashion. These subproblems are optimal control problems for which a differential equation must be solved. This can be done easily by recursively identifying coefficients and performing a line search. The methodology is then extended to a discrete number of stages and allows us to compute the optimal solution in an efficient manner, with a competitive complexity.
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- author
- Berling, Peter LU and Martínez-De-Albéniz, Victor
- organization
- publishing date
- 2016-02-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- inventory, multi-echelon, unit decomposition
- in
- Naval Research Logistics
- volume
- 63
- issue
- 1
- pages
- 15 pages
- publisher
- John Wiley & Sons Inc.
- external identifiers
-
- scopus:84960460651
- wos:000373074400003
- ISSN
- 0894-069X
- DOI
- 10.1002/nav.21675
- language
- English
- LU publication?
- yes
- id
- 442bc0e5-b93c-4ad5-a042-9c2e5d97a6f8
- date added to LUP
- 2016-09-20 07:59:40
- date last changed
- 2025-01-12 11:31:43
@article{442bc0e5-b93c-4ad5-a042-9c2e5d97a6f8, abstract = {{<p>In this article, we present a multistage model to optimize inventory control decisions under stochastic demand and continuous review. We first formulate the general problem for continuous stages and use a decomposition solution approach: since it is never optimal to let orders cross, the general problem can be broken into a set of single-unit subproblems that can be solved in a sequential fashion. These subproblems are optimal control problems for which a differential equation must be solved. This can be done easily by recursively identifying coefficients and performing a line search. The methodology is then extended to a discrete number of stages and allows us to compute the optimal solution in an efficient manner, with a competitive complexity.</p>}}, author = {{Berling, Peter and Martínez-De-Albéniz, Victor}}, issn = {{0894-069X}}, keywords = {{inventory; multi-echelon; unit decomposition}}, language = {{eng}}, month = {{02}}, number = {{1}}, pages = {{32--46}}, publisher = {{John Wiley & Sons Inc.}}, series = {{Naval Research Logistics}}, title = {{A characterization of optimal base-stock levels for a multistage serial supply chain}}, url = {{http://dx.doi.org/10.1002/nav.21675}}, doi = {{10.1002/nav.21675}}, volume = {{63}}, year = {{2016}}, }