Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
480761 | European Journal of Operational Research | 2011 | 12 Pages |
Abstract
We present a heuristic optimization method for stochastic production-inventory systems that defy analytical modelling and optimization. The proposed heuristic takes advantage of simulation while at the same time minimizes the impact of the dimensionality curse by using regression analysis. The heuristic was developed and tested for an oil and gas company, which decided to adopt the heuristic as the optimization method for a supply-chain design project. To explore the performance of the heuristic in general settings, we conducted a simulation experiment on 900 test problems. We found that the average cost error of using the proposed heuristic was reasonably low for practical applications.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Antonio Arreola-Risa, Víctor M. Giménez-García, José Luis Martínez-Parra,