Article ID: | iaor20013192 |
Country: | Netherlands |
Volume: | 70 |
Issue: | 1 |
Start Page Number: | 45 |
End Page Number: | 54 |
Publication Date: | Jan 2001 |
Journal: | International Journal of Production Economics |
Authors: | Silver Edward A., Moon Ilkyeong |
Keywords: | heuristics, programming: branch and bound |
We address a problem of setting reorder points (expressed as time supplies) of a population of items, subject to a restricted set of possible time supplies as well as a budget on the total amount of safety stocks, both important practical constraints. We provide a branch-and-bound algorithm for obtaining the optimal solution. In addition, a simple and efficient heuristic algorithm has been developed. Computational experiments show that the performance of the heuristic is excellent based on a set of realistic examples. However, the typical set of possible time supplies may significantly degrade performance compared with the situation where a continuum of choices are possible.