TY - JOUR
T1 - An enhanced L-Shaped method for optimizing periodic-review inventory control problems modeled via two-stage stochastic programming
AU - Placido dos Santos, Felipe Silva
AU - Oliveira, Fabricio
PY - 2019/6/1
Y1 - 2019/6/1
N2 - This paper presents the development of an enhanced L-Shaped method applied to an inventory management problem that considers a replenishment control system based on the periodic review (R, S) policy. We consider single-item one-echelon problems with uncertain demands and partial backorder that are modeled using two-stage stochastic programming. To enable the consideration of large-scale problems, the classical single-cut L-Shaped method and its extended multi-cut form were initially applied. Preliminary computational results indicated that the classical L-Shaped method outperformed its multi-cut counterpart, even though the former required more iterations to converge to the optimal solution. This observation inspired the development of the techniques presented for enhancing the L-Shape method, which consist of the combination of a novel acceleration technique with an efficient formulation and valid inequalities for the proposed model. Numerical experiments suggest that the proposed approach significantly reduced the computational time required to solve large-scale problems.
AB - This paper presents the development of an enhanced L-Shaped method applied to an inventory management problem that considers a replenishment control system based on the periodic review (R, S) policy. We consider single-item one-echelon problems with uncertain demands and partial backorder that are modeled using two-stage stochastic programming. To enable the consideration of large-scale problems, the classical single-cut L-Shaped method and its extended multi-cut form were initially applied. Preliminary computational results indicated that the classical L-Shaped method outperformed its multi-cut counterpart, even though the former required more iterations to converge to the optimal solution. This observation inspired the development of the techniques presented for enhancing the L-Shape method, which consist of the combination of a novel acceleration technique with an efficient formulation and valid inequalities for the proposed model. Numerical experiments suggest that the proposed approach significantly reduced the computational time required to solve large-scale problems.
KW - Inventory control
KW - L-Shaped method
KW - Partial backordering
KW - Stochastic programming
KW - Uncertain demand
UR - http://www.scopus.com/inward/record.url?scp=85057985796&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2018.11.053
DO - 10.1016/j.ejor.2018.11.053
M3 - Article
AN - SCOPUS:85057985796
SN - 0377-2217
VL - 275
SP - 677
EP - 693
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 2
ER -