Author
Listed:
- Yang Deng
- Andy H. F. Chow
- Yimo Yan
- Zicheng Su
- Zhili Zhou
- Yong-Hong Kuo
Abstract
Effective coordination between production control and distribution planning is critical in supply chain management. However, existing research mainly focuses on responding to stochastic demand, while the impact of uncertain retail capabilities is often overlooked. This study proposes a hierarchical framework that integrates and coordinates production control and distribution planning while explicitly addressing the uncertainty of retail capabilities. Specifically, we develop a reinforcement learning (RL) algorithm that learns stochastic retail capabilities under adaptive production control (upper level) and distribution planning (lower level). This retail information is then fed into the hierarchical control framework, which enhances the performance of both control layers to maximise system profit while considering opportunity costs and holding costs. Moreover, we incorporate a novel holding function based on the exponential penalty term into the reward function to effectively enforce the side constraint of inventory capacity. This approach enables the RL algorithm to derive feasible production policies and thereby enhance the training process. We evaluate the proposed hierarchical controller through a case study utilising real-world transaction data from the steel manufacturing industry. The results demonstrate that the accurate identification of retail capabilities can facilitate inventory management under stochastic market conditions. Furthermore, the hierarchical framework can improve overall profits by coordinating production control actions under different retail strategies.
Suggested Citation
Yang Deng & Andy H. F. Chow & Yimo Yan & Zicheng Su & Zhili Zhou & Yong-Hong Kuo, 2025.
"Hierarchical production control and distribution planning under retail uncertainty with reinforcement learning,"
International Journal of Production Research, Taylor & Francis Journals, vol. 63(12), pages 4504-4522, June.
Handle:
RePEc:taf:tprsxx:v:63:y:2025:i:12:p:4504-4522
DOI: 10.1080/00207543.2025.2452386
Download full text from publisher
As the access to this document is restricted, you may want to
for a different version of it.
Corrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:tprsxx:v:63:y:2025:i:12:p:4504-4522. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
We have no bibliographic references for this item. You can help adding them by using this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TPRS20 .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.