Article ID: | iaor19961951 |
Country: | United Kingdom |
Volume: | 46 |
Issue: | 11 |
Start Page Number: | 1337 |
End Page Number: | 1351 |
Publication Date: | Nov 1995 |
Journal: | Journal of the Operational Research Society |
Authors: | Lefranois Pierre, Martel Alain, Glinas Ren |
This paper reviews some of the current approaches available for computing the demand quantiles required to plan the procurement of items with stochastic non-stationary demands. The paper first describes the stochastic single-item lot-sizing problem considered and then presents a practical solution approach based on a dynamic lot-sizing model. Three methods available to compute demand quantiles are then reviewed and a new procedure based on smoothed order statistics (SOS) is proposed. Finally, the behaviour of these estimation methods, when used to solve single-item lot-sizing problems with non-stationary stochastic demands, is studied by simulation.