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A Global Chance-Constraint for Stochastic Inventory Systems Under Service Level Constraints

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Abstract

We consider a class of production/inventory control problems that has a single product and a single stocking location, for which a stochastic demand with a known non-stationary probability distribution is given. Under the widely-known replenishment cycle policy the problem of computing policy parameters under service level constraints has been modeled using various techniques. Tarim and Kingsman introduced a modeling strategy that constitutes the state-of-the-art approach for solving this problem. In this paper we identify two sources of approximation in Tarim and Kingsman’s model and we propose an exact stochastic constraint programming approach. We build our approach on a novel concept, global chance-constraints, which we introduce in this paper. Solutions provided by our exact approach are employed to analyze the accuracy of the model developed by Tarim and Kingsman.

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Author information

Authors and Affiliations

  1. Centre for Telecommunication Value—Chain Driven Research, Dublin, Ireland

    Roberto Rossi

  2. Cork Constraint Computation Centre, University College, 14 Washington St. West, Cork, Ireland

    Roberto Rossi & Steven Prestwich

  3. Department of Management, Hacettepe University, Ankara, Turkey

    S. Armagan Tarim

  4. Faculty of Computer Science, Izmir University of Economics, Izmir, Turkey

    Brahim Hnich

Authors
  1. Roberto Rossi
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  2. S. Armagan Tarim
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  3. Brahim Hnich
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  4. Steven Prestwich
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Corresponding author

Correspondence to Roberto Rossi.

Additional information

This work was supported by Science Foundation Ireland under Grant No. 03/CE3/I405 as part of the Centre for Telecommunications Value-Chain-Driven Research (CTVR) and Grant No. 00/PI.1/C075.

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Rossi, R., Tarim, S.A., Hnich, B. et al. A Global Chance-Constraint for Stochastic Inventory Systems Under Service Level Constraints. Constraints 13, 490–517 (2008). https://doi.org/10.1007/s10601-007-9038-4

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  • DOI: https://doi.org/10.1007/s10601-007-9038-4

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