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Linear inflation rules for the random yield problem: Analysis and computations. (English) Zbl 1233.90026

Summary: We propose a simple heuristic approach for the inventory control problem with stochastic demand and multiplicative random yield. Our heuristic tries to find the best candidate within a class of policies that are referred to in the literature as the linear inflation rule (LIR) policies. Our approach is computationally fast, easy to implement, and intuitive to understand. Moreover, we find that in a significant number of instances our heuristic performs better than several other well-known heuristics that are available in the literature.

MSC:

90B05 Inventory, storage, reservoirs
90C59 Approximation methods and heuristics in mathematical programming
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