Computing Replenishment Cycle Policy under Non-stationary Stochastic Lead Time

In this paper we address the general multi-period production/inventory problem with non-stationary stochastic demand and supplier lead time under service-level constraints. A replenishment cycle policy (R n ,S n ) is modeled, where R n is the n-th replenishment cycle length and S n is the respective order-up-to-level. Initially we extend an existing formulation for this policy in a way to incorporate a dynamic deterministic lead time with the assumption of order cross-over. Following this, we extend the model to incorporate a non-stationary stochastic lead time. Within a constraint programming framework, a dedicated constraint implementing a hybrid approach is proposed to compute replenishment cycle policy parameters.

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