This paper provides an efficient computational approach to solve a mixed integer programming (MIP) model developed for calculating the parameters of an (R,S) policy in a finite horizon with non-stationary stochastic demand and service level constraints. Given the replenishment periods, we characterize the optimal order-up-to levels for the MIP model and use it to guide the development of a relaxed MIP model, which can be solved in polynomial time. Extensive numerical tests show that our method dominates the MIP solution approach and can handle real-life size problems in trivial time.
|Title of host publication||24th European conference on operational research, July 11-14 2010, Lisbon, Portugal|
|Place of Publication||Lisbon|
|Publication status||Published - 2010|
|Event||EURO XXIV - |
Duration: 11 Jul 2010 → 14 Jul 2010
|Period||11/07/10 → 14/07/10|
Dogru, M., Tarim, S. A., Ozen, U., & Rossi, R. (2010). An efficient computational method for non-stationary (R,S) inventory policy with service level constraints. In 24th European conference on operational research, July 11-14 2010, Lisbon, Portugal (pp. 266).