SOS: A quantile estimation procedure for dynamic lot-sizing problems

SOS: A quantile estimation procedure for dynamic lot-sizing problems

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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: , ,
Abstract:

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.

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