Management Science and Information Systems' Seminar

Topic :Inventory Management Based on Target-Oriented Robust Optimization

Speaker:LIM Yun Fong

Affiliation:Singapore Management University (SMU)

Time:Monday,13 Oct. 14:00-17:00pm

Location:Room K01 Guanghua Building 2

Abstract:We propose a target-oriented robust optimization approach to solve a multi-product, multi-period inventory management problem subject to ordering capacity constraints. We assume the demand for each product in each period is characterized by an uncertainty set, which depends only on the demand's mean and bounds. Under a pre-specified cost target, we determine an ordering policy that maximizes the sizes of all demand uncertainty sets. We prove that a static policy is optimal for our formulation, which significantly reduces the computational burden. By tuning the cost target, the resultant policy can achieve a balance between the expected cost and the associated cost variance. Numerical experiments suggest that, although only limited demand information is used, the proposed approach performs comparably to traditional methods based on dynamic programming and stochastic programming. More importantly, our approach significantly outperforms the traditional methods if the latter assume inaccurate demand distributions. We demonstrate the applicability of our approach using two case studies from different industries.

Bio:LIM Yun Fong is an Associate Professor of Operations Management at the Lee Kong Chian School of Business, Singapore Management University (SMU). His research centers on workforce management and he is especially interested in boosting productivity of work teams in manufacturing, distribution, and services. He has served as Cluster Chair of Workforce Management for INFORMS Annual Meetings. His other research interests include analytics for warehousing and fulfillment in supply chains. Yun Fong’s work has appeared as a keynote paper in INCOM 2009 at Moscow, Russia and in top journals including Operations Research and Management Science. His research has been funded by A*STAR and he was named NOL Fellow in 2012. Yun Fong teaches courses in Operations Management at executive, graduate, and undergraduate levels. He won the 2010 SMU Teaching Excellence Innovative Teacher Award, and his teaching case has been selected as Finalist for the INFORMS Case Competition 2014. He has consulted and is constantly engaged in executive development for corporations such as Building and Construction Authority, KTP Hospital, McMaster-Carr Company, Resort World Sentosa, Schneider Electrics, SingHealth, and YCH Group. Yun Fong obtained both his PhD and MSc degrees in Industrial and Systems Engineering from the Georgia Institute of Technology.

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