Quotation Löhndorf, Nils, Minner, Stefan. 2013. Simulation Optimization for the Stochastic Economic Lot Scheduling Problem. IISE Transactions (formerly known as: IIE Transactions) 45 (7), 796-810.


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Abstract

This article studies simulation optimization methods for the stochastic economic lot scheduling problem. In contrast with prior research, the focus of this work is on methods that treat this problem as a black box. Based on a large-scale numerical study, approximate dynamic programming is compared with a global search for parameters of simple control policies. Two value function approximation schemes are proposed that are based on linear combinations of piecewise-constant functions as well as control policies that can be described by a small set of parameters. While approximate value iteration worked well for small problems with three products, it was clearly outperformed by the global policy search as soon as problem size increased. The most reliable choice in this study was a globally optimized fixed-cycle policy. An additional analysis of the response surface of model parameters on optimal average cost revealed that the cost effect of product diversity was negligible.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal IISE Transactions (formerly known as: IIE Transactions)
Citation Index SCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, STRAT-A, WH-A
Language English
Title Simulation Optimization for the Stochastic Economic Lot Scheduling Problem
Volume 45
Number 7
Year 2013
Page from 796
Page to 810
Reviewed? Y
URL http://www.tandfonline.com/doi/abs/10.1080/0740817X.2012.662310
DOI http://dx.doi.org/10.1080/0740817X.2012.662310

Associations

People
Löhndorf, Nils (Former researcher)
External
Minner, Stefan (Technische Universität München, Germany)
Organization
Produktionsmanagement (Taudes) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
1121 Operations research (Details)
5300 Economics (Details)
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