Optimizing Strategic Safety Stock Placement in Two-Layer Supply Chains
Name
IMST017.pdf
Size
102.23 KB
Format
Adobe PDF
Checksum (MD5)
73be7f2549ca5329b1a15174d5173186
Author(s)
Lesnaia, Ekaterina
Date Issued
January 2003
Series/Report no.
Innovation in Manufacturing Systems and Technology (IMST);
Abstract
In this paper, we minimize the holding cost of the safety stock in the supply chain subject to linear constraints on the service times between the nodes of the network. In the problem, the objective function is concave as we assume the demand to be bounded by a concave function. The optimal solutions of the problem belong to the set of extreme points of the polyhedron, specified by the constraints of the problem. We first characterize the extreme points for the two-layer networks and then provide bounds to use in a branch and bound algorithm.
Subjects
base-stock policy
dynamic programming application
multi-stage supply-chain application
safety stock optimization
branch and bound algorithm
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