Publication:
Optimal threshold levels in stochastic fluid models via simulation-based optimization

dc.contributor.coauthorGurkan, Gul
dc.contributor.coauthorOzdemir, Ozge
dc.contributor.departmentDepartment of Industrial Engineering
dc.contributor.kuauthorKaraesmen, Fikri
dc.contributor.schoolcollegeinstituteCollege of Engineering
dc.date.accessioned2024-11-10T00:08:58Z
dc.date.issued2007
dc.description.abstractA number of important problems in production and inventory control involve optimization of multiple threshold levels or hedging points. We address the problem of finding such levels in a stochastic system whose dynamics can be modelled using generalized semi-Markov processes (GSMP). The GSMP framework enables us to compute several performance measures and their sensitivities from a single simulation run for a general system with several states and fairly general state transitions. We then use a simulation-based optimization method, sample-path optimization, for finding optimal hedging points. We report numerical results for systems with more than twenty hedging points and service-level type probabilistic constraints. In these numerical studies, our method performed quite well on problems which are considered very difficult by current standards. Some applications falling into this framework include designing manufacturing flow controllers, using capacity options and subcontracting strategies, and coordinating production and marketing activities under demand uncertainty.
dc.description.indexedbyWOS
dc.description.indexedbyScopus
dc.description.issue1
dc.description.openaccessYES
dc.description.publisherscopeInternational
dc.description.sponsoredbyTubitakEuN/A
dc.description.volume17
dc.identifier.doi10.1007/s10626-006-0002-z
dc.identifier.issn0924-6703
dc.identifier.scopus2-s2.0-33847057320
dc.identifier.urihttps://doi.org/10.1007/s10626-006-0002-z
dc.identifier.urihttps://hdl.handle.net/20.500.14288/17047
dc.identifier.wos244186200003
dc.keywordsStochastic optimization
dc.keywordsHedging points
dc.keywordsThreshold levels
dc.keywordsGeneralized semi-markov processes
dc.keywordsInfinitesimal perturbation analysis
dc.keywordsSample-path optimization
dc.keywordsService-level constraints
dc.keywordsStochastic fluid models
dc.keywordsUnreliable manufacturing systems
dc.keywordsSample-path optimization
dc.keywordsPerturbation analysis
dc.keywordsFlow controllers
dc.keywordsProduction lines
dc.keywordsCapacity
dc.keywordsPolicies
dc.keywordsDemand
dc.keywordsDesign
dc.language.isoeng
dc.publisherSpringer
dc.relation.ispartofDiscrete Event Dynamic Systems-Theory and Applications
dc.subjectAutomation
dc.subjectControl systems
dc.subjectOperations research
dc.subjectManagement science
dc.subjectMathematics
dc.subjectApplied mathematics
dc.titleOptimal threshold levels in stochastic fluid models via simulation-based optimization
dc.typeJournal Article
dspace.entity.typePublication
local.contributor.kuauthorKaraesmen, Fikri
local.publication.orgunit1College of Engineering
local.publication.orgunit2Department of Industrial Engineering
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