Robust Optimization and Simulation of Production/inventory System with Stochastic Demand

In this paper a multi-stage multi-item production/inventory system with limited production capacity in stochastic demand environment is considered. We proposed a robust optimization model to deal with the uncertain market demands that are denoted as a number of discrete scenarios with known probabil...

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Bibliographic Details
Main Authors: Zhang Ping, Zhou Zu-de, Chen You-ping, Ni Long-yu
Format: Conference Proceeding
Language:English
Subjects:
Algorithm design and analysis
Costs
Genetic algorithm
Genetic algorithms
Linear programming
Manufacturing processes
Optimized production technology
Production systems
Production/inventory system
Robust optimization
Robustness
Stochastic demand
Stochastic processes
Stochastic systems
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Summary:In this paper a multi-stage multi-item production/inventory system with limited production capacity in stochastic demand environment is considered. We proposed a robust optimization model to deal with the uncertain market demands that are denoted as a number of discrete scenarios with known probabilities. An effective genetic algorithm is designed. The result of a simulation example shows that robust optimization is possible. By choice of proper programming weightω, we can meet the stochastic demand with little error and very little cost.
ISSN:2161-8151
2161-816X
DOI:10.1109/ICAL.2007.4338606