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An optimal solution for the stochastic version of the Wagner-Whitin dynamic lot-size model

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  • Vargas, Vicente

Abstract

We present an algorithm for determining the optimal solution over the entire planning horizon for the dynamic lot-size model where demand is stochastic and non-stationary. The optimal solution to the deterministic problem is the well-known Wagner-Whitin algorithm. The present work contributes principally to knowledge building and provides a tool for researchers. One potentially useful contribution to practice is the solution to an important special case, where demand follows normal distributions. Other contributions to practice will likely flow from the development of improved heuristics and the improved basis to evaluate heuristic performance.

Suggested Citation

  • Vargas, Vicente, 2009. "An optimal solution for the stochastic version of the Wagner-Whitin dynamic lot-size model," European Journal of Operational Research, Elsevier, vol. 198(2), pages 447-451, October.
  • Handle: RePEc:eee:ejores:v:198:y:2009:i:2:p:447-451
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    References listed on IDEAS

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    1. Tarim, S. Armagan & Kingsman, Brian G., 2004. "The stochastic dynamic production/inventory lot-sizing problem with service-level constraints," International Journal of Production Economics, Elsevier, vol. 88(1), pages 105-119, March.
    2. Wallace J. Hopp (Editor-in-Chief), 2004. "Ten Most Influential Papers of Management Science's First Fifty Years," Management Science, INFORMS, vol. 50(12_supple), pages 1763-1763, December.
    3. James H. Bookbinder & Jin-Yan Tan, 1988. "Strategies for the Probabilistic Lot-Sizing Problem with Service-Level Constraints," Management Science, INFORMS, vol. 34(9), pages 1096-1108, September.
    4. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    5. Harvey M. Wagner, 2004. "Comments on ÜDynamic Version of the Economic Lot Size ModelÝ," Management Science, INFORMS, vol. 50(12_supple), pages 1775-1777, December.
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    Citations

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    Cited by:

    1. Vargas, Vicente & Metters, Richard, 2011. "A master production scheduling procedure for stochastic demand and rolling planning horizons," International Journal of Production Economics, Elsevier, vol. 132(2), pages 296-302, August.
    2. Özen, Ulaş & Doğru, Mustafa K. & Armagan Tarim, S., 2012. "Static-dynamic uncertainty strategy for a single-item stochastic inventory control problem," Omega, Elsevier, vol. 40(3), pages 348-357.
    3. repec:eee:ejores:v:263:y:2017:i:3:p:838-863 is not listed on IDEAS
    4. repec:spr:annopr:v:264:y:2018:i:1:d:10.1007_s10479-017-2662-5 is not listed on IDEAS
    5. repec:taf:tprsxx:v:55:y:2017:i:22:p:6801-6823 is not listed on IDEAS
    6. Tempelmeier, Horst & Herpers, Sascha, 2011. "Dynamic uncapacitated lot sizing with random demand under a fillrate constraint," European Journal of Operational Research, Elsevier, vol. 212(3), pages 497-507, August.
    7. repec:eee:ejores:v:269:y:2018:i:1:p:244-257 is not listed on IDEAS
    8. Koca, Esra & Yaman, Hande & Selim Aktürk, M., 2015. "Stochastic lot sizing problem with controllable processing times," Omega, Elsevier, vol. 53(C), pages 1-10.
    9. Tunc, Huseyin & Kilic, Onur A. & Tarim, S. Armagan & Eksioglu, Burak, 2013. "A simple approach for assessing the cost of system nervousness," International Journal of Production Economics, Elsevier, vol. 141(2), pages 619-625.
    10. Govindan, Kannan, 2015. "The optimal replenishment policy for time-varying stochastic demand under vendor managed inventory," European Journal of Operational Research, Elsevier, vol. 242(2), pages 402-423.
    11. Tarim, S. Armagan & Dogru, Mustafa K. & Özen, Ulas & Rossi, Roberto, 2011. "An efficient computational method for a stochastic dynamic lot-sizing problem under service-level constraints," European Journal of Operational Research, Elsevier, vol. 215(3), pages 563-571, December.
    12. repec:eee:proeco:v:189:y:2017:i:c:p:86-96 is not listed on IDEAS
    13. Stößlein, Martin & Kanet, John Jack & Gorman, Mike & Minner, Stefan, 2014. "Time-phased safety stocks planning and its financial impacts: Empirical evidence based on European econometric data," International Journal of Production Economics, Elsevier, vol. 149(C), pages 47-55.

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