Logistics Network Design with Inventory Stocking for Low-demand Parts

DATE: March 13, 2009

TIME: 12:00 PM – 1:00 PM

LOCATION: Executive classroom

FEES: none

EVENT CONTACT:

Anita Race, H. Milton Stewart School of Industrial and Systems Engineering
Contact Anita Race

TITLE: Logistics Network Design with Inventory Stocking for Low-demand Parts: Modeling and Optimization

SPEAKER: Dr. Vishv Jeet

ABSTRACT:

This paper models, analyzes and develops solution techniques for a network design and inventory stocking problem. The proposed model captures important features of a real service part logistics system, namely time-based service level requirements, and stochastic demands satisfied by facilities operating with one-for-one replenishment policy. In essence, along with usual decisions of location and allocation, the model considers stock levels and fill rates as decisions, varying across facilities to achieve system-wide target service levels. A variable substitution scheme is used to develop an equivalent convex model for an originally non-convex problem. An outer-approximation scheme is used to linearize the convex model. Exact solution schemes based on the linearized model are proposed and computationally less demanding lower and upper bounding techniques for the problem are devised. Results from extensive computational experiments on a variety of problem instances based on a real-life industrial data show the effectiveness of the overall approach.

Reference: Jeet, V., Kutanoglu, E., and Partani, A. (2009) Logistics Network Design with Inventory Stocking for Low-demand Parts: Modeling and Optimization. IIE Transactions, 41, 1–19.

This is a joint SCL/DOS Seminar. Pizza and refreshments sponsored by The Supply Chain Logistics Institute (SCL).