Operations Research, Systems Engineering and Industrial Engineering Commons^™

Methodology For Analyzing And Characterizing Error Generation In Presence Of Autocorrelated Demands In Stochastic Inventory Models, Rafael Diaz

Computational Modeling & Simulation Engineering Theses & Dissertations

Most techniques that describe and solve stochastic inventory problems rely upon the assumption of identically and independently distributed (IID) demands. Stochastic inventory formulations that fail to capture serially-correlated components in the demand lead to serious errors. This dissertation provides a robust method that approximates solutions to the stochastic inventory problem where the control review system is continuous, the demand contains autocorrelated components, and the lost sales case is considered. A simulation optimization technique based on simulated annealing (SA), pattern search (PS), and ranking and selection (R&S) is developed and used to generate near-optimal solutions. The proposed method accounts for the …