Application of the cross-entropy method to the buffer allocation problem in a simulation-based environment

Application of the cross-entropy method to the buffer allocation problem in a simulation-based environment

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Article ID: iaor20053293
Country: Netherlands
Volume: 134
Issue: 1
Start Page Number: 137
End Page Number: 151
Publication Date: Feb 2005
Journal: Annals of Operations Research
Authors: , , ,
Keywords: heuristics, simulation
Abstract:

The buffer allocation problem (BAP) is a well-known difficult problem in the design of production lines. We present a stochastic algorithm for solving the BAP, based on the cross-entropy method, a new paradigm for stochastic optimization. The algorithm involves the following iterative steps: (a) the generation of buffer allocations according to a certain random mechanism, followed by (b) the modification of this mechanism on the basis of cross-entropy minimization. Through various numerical experiments we demonstrate the efficiency of the proposed algorithm and show that the method can quickly generate (near-)optimal buffer allocations for fairly large production lines.

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