Minimising total average cycle stock subject to practical constraints

Minimising total average cycle stock subject to practical constraints

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Article ID: iaor2004937
Country: United Kingdom
Volume: 54
Issue: 4
Start Page Number: 362
End Page Number: 370
Publication Date: Apr 2003
Journal: Journal of the Operational Research Society
Authors:
Keywords: programming: integer
Abstract:

Silver and Moon address the problem of minimising total average cycle stock subject to two practical constraints. They provide a dynamic programming formulation for obtaining an optimal solution and propose a simple and efficient heuristic algorithm. Hsieh proposes a 0–1 linear programming approach to the problem and a simple heuristic based on the relaxed 0–1 linear programming formulation. We show in this paper that the formulation of Hsieh can be improved for solving very large size instances of this inventory problem. So the mathematical approach is interesting for several reasons: the definition of the model is simple, its implementation is immediate by using a mathematical programming language together with a mixed integer programming software and the performance of the approach is excellent. Computational experiments carried out on the set of realistic examples considered in the above references are reported. We also show that the general framework for modelling given by mixed integer programming allows the initial model to be extended in several interesting directions.

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