The Impact of Modeling on Robust Inventory Management Under Demand Uncertainty

• 成果类型: Article
• 署名作者: Solyali, Oguz; Cordeau, Jean-Francois; Laporte, Gilbert
• 署名单位: Middle East Technical University; Universite de Montreal; Universite de Montreal; HEC Montreal
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2015.2183
• 发表日期: 2016
• 页码: 1188-1201
• 关键词: Robust Optimization; Inventory management; lot sizing; integer programming

摘要

This study considers a basic inventory management problem with nonzero fixed order costs under interval demand uncertainty. The existing robust formulations obtained by applying well-known robust optimization methodologies become computationally intractable for large problem instances due to the presence of binary variables. This study resolves this intractability issue by proposing a new robust formulation that is shown to be solvable in polynomial time when the initial inventory is zero or negative. Because of the computational efficiency of the new robust formulation, it is implemented on a folding-horizon basis, leading to a new heuristic for the problem. The computational results reveal that the new heuristic is not only superior to the other formulations regarding the computing time needed, but also outperforms the existing robust formulations in terms of the actual cost savings on the larger instances. They also show that the actual cost savings yielded by the new heuristic are close to a lower bound on the optimal expected cost.