Stochastic Programming for the Optimization of Transportation-Inventory Strategy

摘要

In today’s competitive environment, supply chain management is a major concern for a company. Two of the key is- sues in supply chain management are transportation and inventory management. To achieve significant savings, com- panies should integrate these two issues instead of treating them separately. In this paper we develop a framework for modeling stochastic programming in a supply chain that is subject to demand uncertainty. With reasonable assump- tions, two stochastic programming models are presented, respectively, including a single-period and a multi-period situations. Our assumptions allow us to capture the stochastic nature of the problem and translate it into a determinis- tic model. And then, based on the genetic algorithm and stochastic simulation, a solution method is developed to solve the model. Finally, the computational results are provided to demonstrate the effectiveness of our model and algo- rithm.