Inventory control implies dynamic decision making. Therefore, dynamic programming seems an appropriate approach to look for order policies. For finite horizon planning, the implementation of service level constraints provides a big challenge. This paper illustrates with small instances the implementation of stochastic dynamic programming (SDP) to derive order policies in a straightforward way for systems with non-stationary demand and service level constraints. The small instances allow to perform a full enumeration of possible policies and show that the SDP derived policies are not necessarily optimal.
|Title of host publication||Computational Science and Its Applications CSA 2015, Part II|
|Editors||O. Gervasi, B. Murgante, S. Misra, M.L. Gavrilova, A.M. Alves Coutinho Rocha, C. Torre, D. Taniar, B.O. Apduhan|
|Place of Publication||Cham, Switzerland|
|Publication status||Published - 2015|
|Name||Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)|
Pauls-Worm, K. G. J., & Hendrix, E. M. T. (2015). SDP in Inventory Control: Non-stationary Demand and Service Level Constraints. In O. Gervasi, B. Murgante, S. Misra, M. L. Gavrilova, A. M. Alves Coutinho Rocha, C. Torre, D. Taniar, & B. O. Apduhan (Eds.), Computational Science and Its Applications CSA 2015, Part II (pp. 397-412). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); No. 9156).. https://doi.org/10.1007/978-3-319-21407-8_29