Inventory lot-sizing with supplier selection under non-stationary stochastic demand

Abstract

Inventory lot-sizing and supplier selection problem has been studied in the literature considering mainly time-varying deterministic demand. However, in real life, most of the products exhibit non-stationary stochastic demand. In this context, we propose an integer linear programming model for inventory lot-sizing and supplier selection problem under non-stationary stochastic demand with all-units quantity discounts and fill rate constraints. Through detailed analysis of experimental results, we show the impacts of fill rate requirements and demand coefficient of variation on costs, inventory levels and order allocations.

Keywords:

• inventory
• lot-sizing
• supplier selection
• non-stationary stochastic demand
• fill rate

Disclosure statement

No potential conflict of interest was reported by the authors.