Stochastic optimization model for random demand stocks, with storage expenses accounting

The paper presents a possible stock level optimization method, based on a stochastic model. The consume demand for the stored product is considered a discrete random quantity. It was adopted the hypothesis that the repartition law of the demand probability is known for the time interval of stock exi...

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Bibliographic Details
Main Authors: Ciolan, Gheorghe, Preda, Ion, Nastasoiu, Mircea
Format: Conference Proceeding
Language:English
Subjects:
Costs
Demand
Optimization models
Stochastic models
Online Access:Get full text
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Summary:The paper presents a possible stock level optimization method, based on a stochastic model. The consume demand for the stored product is considered a discrete random quantity. It was adopted the hypothesis that the repartition law of the demand probability is known for the time interval of stock existence (operation). The main aim of the optimization procedure is to minimize the total expenses (costs) involved by the existence or lack of the reserve stock. For a better understanding of the proposed algorithm, a calculation example is presented.
ISSN:2261-236X
2274-7214
2261-236X
DOI:10.1051/matecconf/201712605001