A Simulation- and Metaheuristic-Based Approach for Inventory Optimization of Complex Distribution Systems
In today’s dynamic market numerous dynamic influencing factors have seriously aggravates the difficulties of inventory planning of the complex distribution systems. This paper proposes a simulation- and metaheuristic-based approach for the optimization of
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A Simulation- and Metaheuristic-Based Approach for Inventory Optimization of Complex Distribution Systems Dianjun Fang and Cong Li
Abstract In today’s dynamic market numerous dynamic influencing factors have seriously aggravates the difficulties of inventory planning of the complex distribution systems. This paper proposes a simulation- and metaheuristic-based approach for the optimization of the inventory policies in complex distribution systems. The initial multi-echelon inventory policies are handed over to a simulation model, which is capable of modeling complexity and uncertainties of the distribution network and simulating them under respective scenarios. Through comprehensively analyzing the KPIs (logistic service level and logistic costs) of this set of multi-echelon inventory policies, their levels of robustness can be clearly ascertained. Based on the simulation results, a metaheuristic-based optimizer regenerates improved (more robust) multi-echelon inventory policies, which are once again comprehensively and precisely evaluated through simulation. This closed feedback loop forms a simulation optimization process that enables the autonomous evolution of multi-echelon inventory policies of complex distribution systems. Keywords Distribution system algorithms Inventory policies
Simulation
Metaheuristic
Evolutionary
D. Fang Sino-German College for Graduate Study, Tongji University, Shanghai, China e-mail: [email protected] C. Li (&) Fraunhofer Institute for Material Flow and Logistics, Dortmund, Germany e-mail: [email protected]
W. Lu et al. (eds.), Proceedings of the 2012 International Conference on Information Technology and Software Engineering, Lecture Notes in Electrical Engineering 211, DOI: 10.1007/978-3-642-34522-7_65, Ó Springer-Verlag Berlin Heidelberg 2013
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65.1 Introduction In today’s dynamic market, distribution networks are always finding themselves in a continuously changing environment. Numerous driving forces of changes come not only from outside such as volatile customer demand, shortened product life cycle and individualized customer wishes [16]; but also from inside, like short-ofstock, delay or suspension [19]. These mutually overlapping and interacting factors cause turbulent changes in the environment that distribution networks are facing and impose strong pressures for adaptation on every level of distribution networks [5]. Consequently, today’s distribution networks are highly expected to be adaptive or robust, which means that they will not leave the specified (optimal) logistic cost and logistic service level corridor even under the changing conditions [14]. Inventory is one important type of configuration parameter of distribution networks. On the one hand, as ‘‘an aggregate resource that spans and connects all nodes’’ in distribution networks, inventory serves as an important means to ‘‘separate or buffer one location in the distribution channel from another and the discontinuity of customer demand from availa
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