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supply system
Francis de Vricourt, Fikri Karaesmen, Yves Dallery
26.1.2015
Presentation by Snke Matthewes and Ingo Marquart
Outline
1. Introduction
2. Model Set-up & Problem Definition
3. Exploring the Optimal Solution
3.1 What Value Functions make sense?
3.2 Multilevel Rationing (ML) Policies
3.3 Induction Proof Sketch
Introduction
Introduction (cont.)
Example
c(x(t)) = hx+
1 (t) + b1 x1 (t) b2 x2 (t) b3 x3 (t)
4. Demand arrival rates 1 , 2 , 3
5. Production rate i i
6. This is a homogeneous rate, continuous DP problem Pn (here
n = 3)
0, Produce nothing
1, Satisfy demand k
Ck =
(2)
k, Backorder demand k
C1 = 1, Satisfy demand or backorder if inventory is empty
(3)
t
min E
e (hx1 (t) + b1 x1 (t) b2 x2 (t) b3 x3 (t))dt
Define Un as follows:
1. v(x + ei ) < v(x) if xi < 0
better to satisfy demands; you have to produce
2. v(x + ei ) < v(x + ej ) if 1 i < j
satisfying more expensive demands saves more costs
if i is backordered, then i + 1, ... , n have to be backordered as
well
3. v(x + e1 ej ) < v(x + e1 ei ) if 1 < i < j
backordering more expensive demands will cost you more
if you satisfy j, then you have to satisfy j 1, ... , 1 as well
Lemma 1. If v Un then T v Un .
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(4)
C0 = k, if x1 zk and m(x) = k < n + 1
1,
Ck =
k,
if x1 > zk
if x1 zk
and m(x) k
(5)
Scenario 1:
z4 > x1 > z3 > z2 > z1 = 0
all arriving demands are satisfied
Ck = 1, k
Scenario 2:
z4 > z3 > z2 > x1 > z1 = 0
classes 2 & 3 are backordered, only 1 immediately satisfied
Ck = k, for k = 2, 3 and C1 = 1
( production for inventory: C0 = 1 as x1 < zk until x1 = z2 )
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Main Result 1
Theorem:
1. The optimal policy for Pn is a ML policy with rationing levels z
2. z is such that the projection (subvector) zk and corresponding ML
policy also solves a transformed P n1 , k < n
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Sketch of proof
Part 1 of Theorem
Part 2 of Theorem
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Illustration
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Illustration (cont.)
g0 g1
g0
and
2 =
g0 g2
g0
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Illustration (cont.)
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Thank you
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i i
+ since
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Appendix 2: T-Operators
T1 v(x) = v(x e1 )
if x1 > 0
ifx1 0
for k s.t. 1 < k n.
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