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Robust policies for a multi-stage production/inventory problem with switching costs and uncertain demand

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  • Cong Cheng
  • Lixin Tang

Abstract

In this paper, we seek robust policies for a multi-stage production/inventory problem to minimise total costs, including switching, production, inventory or shortage costs. While minimising switching costs often leads to non-convexity in the model, 0–1 variables are introduced to linearise the objective function. Considering the impossibility of obtaining the exact distribution of uncertain demand, we study the production/inventory problem under worst cases to resist uncertainty. In contrast to traditional inventory problems, unexpected yields in production are considered. Robust support vector regression is developed to approximate the yields of each unit. A mixed-integer linear programming is proposed, employing the duality theory to address the min–max model. A practical case study from cold rolling is considered. Experiments on the actual steel production data are reported to illustrate the validity of the proposed approach.

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  • Cong Cheng & Lixin Tang, 2018. "Robust policies for a multi-stage production/inventory problem with switching costs and uncertain demand," International Journal of Production Research, Taylor & Francis Journals, vol. 56(12), pages 4264-4282, June.
    • Handle: RePEc:taf:tprsxx:v:56:y:2018:i:12:p:4264-4282
    DOI: 10.1080/00207543.2017.1413257
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    Cited by:

    1. Jing Wu & Dan Zhang & Yang Yang & Gongshu Wang & Lijie Su, 2022. "Multi-Stage Multi-Product Production and Inventory Planning for Cold Rolling under Random Yield," Mathematics, MDPI, vol. 10(4), pages 1-21, February.
    2. Zhang, Mingze & Li, Weidong & Yu, Samson Shenglong & Wen, Kerui & Zhou, Chen & Shi, Peng, 2021. "A unified configurational optimization framework for battery swapping and charging stations considering electric vehicle uncertainty," Energy, Elsevier, vol. 218(C).

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