Volume 23, Issue 4 (IJIEPR 2012)                   IJIEPR 2012, 23(4): 277-284 | Back to browse issues page

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Mahootchi M, Ahmadi T, Ponnambalam K. Introducing a New Formulation for the Warehouse Inventory Management Systems: with Two Stochastic Demand Patterns. IJIEPR 2012; 23 (4) :277-284
URL: http://ijiepr.iust.ac.ir/article-1-456-en.html
1- Amirkabir University of Technology
2- University of Waterloo , ponnu@uwaterloo.ca
Abstract:   (7593 Views)
This paper presents a new formulation for warehouse inventory management in a stochastic situation. The primary source of this formulation is derived from FP model, which has been proposed by Fletcher and Ponnambalam for reservoir management. The new proposed mathematical model is based on the first and the second moments of storage as a stochastic variable. Using this model, the expected value of storage, the variance of storage, and the optimal ordering policies are determined. Moreover, the probability of within containment, surplus, and shortage are computable without adding any new variables. To validate the optimization model, a Monte Carlo simulation is used. Furthermore, to evaluate the performance of the optimal FP policy, It is compared to (s*,S*) policy, as a very popular policy used in the literature, in terms of the expected total annual cost and the service level. It is also demonstrated that the FP policy has a superior performances than (s*,S*) policy.
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Type of Study: Research | Subject: Operations Research
Received: 2012/07/7 | Published: 2012/11/15

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