Journal of the Korea Society for Simulation (한국시뮬레이션학회논문지)

The Korea Society for Simulation (한국시뮬레이션학회)
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Application of Stochastic Optimization Method to (s, S) Inventory System

(s, S) 재고관리 시스템에 대한 확률최적화 기법의 응용

  • Chimyung Kwon (Division of Management Information Systems, Dong-a University)
  • Published : 2003.06.01
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Abstract

In this paper, we focus an optimal policy focus optimal class of (s, S) inventory control systems. To this end, we use the perturbation analysis and apply a stochastic optimization algorithm to minimize the average cost over a period. We obtain the gradients of objective function with respect to ordering amount S and reorder point s via a combined perturbation method. This method uses the infinitesimal perturbation analysis and the smoothed perturbation analysis alternatively according to occurrences of ordering event changes. Our simulation results indicate that the optimal estimates of s and S obtained from a stochastic optimization algorithm are quite accurate. We consider that this may be due to the estimated gradients of little noise from the regenerative system simulation, and their effect on search procedure when we apply the stochastic optimization algorithm. The directions for future study stemming from this research pertain to extension to the more general inventory system with regard to demand distribution, backlogging policy, lead time, and review period. Another directions involves the efficiency of stochastic optimization algorithm related to searching procedure for an improving point of (s, S).

Keywords

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