1. An efficient procedure for non-stationary inventory control.
- Author
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Gavirneni, Srinagesh and Tayur, Sridhar
- Subjects
- *
INVENTORY control , *MATHEMATICAL models , *PHYSICAL distribution of goods , *BUSINESS logistics , *PRODUCTION control , *INDUSTRIAL procurement , *PRODUCT management - Abstract
We present an efficient solution method -- Direct Derivative Estimation (DDE) -- for computing optimal order-up-to levels for a discrete time non-stationary inventory control model. We generalize a number of non-stationary inventory control models (which underlie larger models of supply chains) that include forecast updates. seasonality, information sharing, and exchange-rate fluctuations. This procedure is different from the existing ones in that it computes, in a recursive manner, the derivative of the cost function and not the cost function itself. It can also handle a much wider variety of fluctuations in the problem parameters. In our computational testing it was found to be considerably faster than Dynamic Programming and Infinitesimal Perturbation Analysis. [ABSTRACT FROM AUTHOR]
- Published
- 2001
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