An efficient reformulation of the multiechelon stochastic inventory system with uncertain demands | Zendy

Nyberg Axel | Zendy; Grossmann Ignacio E. | Zendy; Westerlund Tapio | Zendy

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An efficient reformulation of the multiechelon stochastic inventory system with uncertain demands

Author(s) -

Nyberg Axel,

Grossmann Ignacio E.,

Westerlund Tapio

Publication year - 2013

Publication title -

aiche journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.958

H-Index - 167

eISSN - 1547-5905

pISSN - 0001-1541

DOI - 10.1002/aic.13977

Subject(s) - mathematical optimization , scheme (mathematics) , piecewise linear function , stochastic programming , decomposition , integer programming , benders' decomposition , piecewise , mathematics , linear programming , integer (computer science) , decomposition method (queueing theory) , computer science , discrete mathematics , geometry , mathematical analysis , ecology , biology , programming language

Significance It is shown that by reformulating the three‐stage multiechelon inventory system with specific exact linearizations, larger problems can be solved directly with mixed‐integer linear programming ( MILP ) without decomposition. The new formulation is significantly smaller in the number of continuous variables and constraints. An MILP underestimation of the problem can be solved as part of a sequential piecewise approximation scheme to solve the problem within a desired optimality gap.

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