A mathematical model for the product mixing and lot-sizing problem by considering stochastic demand

Abstract

The product-mix planning and the lot size decisions are some of the most fundamental research themes for the operations research community. The fact that markets have become more unpredictable has increaed the importance of these issues, rapidly. Currently, directors need to work with product-mix planning and lot size decision models by introducing stochastic variables related to the demands, lead times, etc. However, some real mathematical models involving stochastic variables are not capable of obtaining good solutions within short commuting times. Several heuristics and metaheuristics have been developed to deal with lot decisions problems, in order to obtain high quality results within short commuting times. Nevertheless, the search for an efficient model by considering product mix and deal size with stochastic demand is a prominent research area. This paper aims to develop a general model for the product-mix, and lot size decision within a stochastic demand environment, by introducing the Economic Value Added (EVA) as the objective function of a product portfolio selection. The proposed stochastic model has been solved by using a Sample Average Approximation (SAA) scheme. The proposed model obtains high quality results within acceptable computing times.

A Mathematical Model for Scheduling and Assignment of Customers in Hospital Waste Collection Routes

“…Future research studies are related to the solution of the stochastic version of the problem by using techniques such as Sample Average Approximation (SAA) (Paz et al [44], Rodado et al [45] and Escobar et al [46]), and also the use of heuristic or metaheuristic strategies based on a granular search for large instances such as similar works proposed by Bernal et al [47], Bernal et al [48], Bernal et al [49], Escobar [50], Puenayan et al [51], and Escobar et al [52], Escobar and Linfati [53], and Linfati et al [54].…”

Mathematical Optimization Model for Truck Scheduling in a Distribution Center with a Mixed Service-Mode Dock Area

“…Also, stochastic considerations must be incorporated into the proposed model. Solution strategies for the stochastic model such as Scenarios [43,44] or Sample Average Approximation [45,46] must be applied. Similarly, a heuristic method can be developed to solve problems with larger-scale instances and compare these with the results obtained in this paper.…”

Supply and Demand Drug Shortage Causes: Patient-centric Business Model and its Application

“…Yang and Pan (2004) offered integrated inventory model. Rodado et al (2017) proposed mathematical model with product mixing that considers shortage with one-month time period. Hidayat et al (2012) investigated controllable buyer᾽s lead time that can be shortened in product delivery by adding costs.…”