Distribution-independent inventory approach under multiple service level targets
A system and method are disclosed for an inventory planner that generates an inventory policy using any form of demand distributions, non-linear cost functions and/or multiple target measures of service levels, while taking into account a supply order lead time, such as, for example, a static or stochastic supply order lead time. The inventory policy generated by the inventory planner comprises an optimal and reproducible solution to one or more supply chain planning problems.
1. A system, comprising:
a computer comprising a processor and a memory, the computer configured to:
generate one or more transitional matrices;
generate one or more reward matrices;
model a supply chain planning problem as a Markov decision process based, at least in part, on the generated one or more transitional matrices and the generated one or more reward matrices;
solve the Markov decision process, by:
determining, from solution values, a resulting state after an order action is applied; and
generating from the solution values, indices comprising a minimal state and a target state;
generate an inventory policy based, at least in part, on the solution of the modeled supply chain planning problem, wherein the computer adjusts inventory levels of at least one stocking point and adjusts sourcing of one or more supply chain entities, based at least in part, on the inventory policy; and
in response to and based, at least in part, on the inventory policy, cause the one or more supply chain entities to ship one or more items.
2. The system of claim 1 , wherein the Markov decision process further comprises absorbing states, wherein the absorbing states prevent an inventory state larger than a capacity of an inventory or an unacceptable stockout level.
3. The system of claim 1 , wherein the one or more reward matrices define:
one or more costs, wherein each cost of the one or more costs is associated with an action in each state of the Markov decision process; and
one or more penalties, wherein each penalty of the one or more penalties is associated with a service level violation.
4. The system of claim 1 , wherein the Markov decision process further comprises a number of steps of time.
5. The system of claim 1 , wherein the Markov decision process further comprises constraints, wherein the constraints further comprise an inventory reorder point and inventory target level.
6. The system of claim 1 , wherein the one or more reward matrices further comprise an inventory cost or a backlog cost for a particular action and a particular state.
7. The system of claim 1 , wherein the computer is further configured to:
aggregate the one or more transitional matrices into a single transition matrix for each order quantity.
8. A method, comprising:
generating, by a computer comprising a processor and a memory, one or more transitional matrices;
generating, by the computer, one or more reward matrices;
modeling, by the computer, a supply chain planning problem as a Markov decision process based, least in part, on the generated one or more transitional matrices and the generated one or more reward matrices;
solving the Markov decision process, by:
determining, by the computer, from solution values, a resulting state after an order action is applied; and
generating, by the computer, from the solution values, indices comprising a minimal state and a target state;
generating, by the computer, an inventory policy based at least in part, on the solution of the modeled supply chain planning problem, wherein the computer adjusts inventory levels of at least one stocking point, based at least in part, on the inventory policy and adjusts sourcing of one or more supply chain entities; and
in response to and based, at least in part, on the inventory policy, cause, by the computer, one or more items to be shipped from an inventory.
9. The method of claim 8 , wherein the Markov decision process further comprises absorbing states, wherein the absorbing states prevent an inventory state larger than a capacity of an inventory or an unacceptable stockout level.
10. The method of claim 8 , wherein the one or more reward matrices define:
one or more costs, wherein each cost of the one or more costs is associated with an action in each state of the Markov decision process; and
one or more penalties, wherein each penalty of the one or more penalties is associated with a service level violation.
11. The method of claim 8 , wherein the Markov decision process further comprises a number of steps of time.
12. The method of claim 8 , wherein the Markov decision process further comprises constraints, wherein the constraints further comprise an inventory reorder point and inventory target level.
13. The method of claim 8 , wherein the one or more reward matrices further comprise an inventory cost or a backlog cost for a particular action and a particular state.
14. The method of claim 8 , further comprising:
aggregating, by the computer, the one or more transitional matrices into a single transition matrix for each order quantity.
15. A non-transitory computer-readable medium embodied with software, the software when executed is configured to:
generate one or more transitional matrices;
generate one or more reward matrices;
model a supply chain planning problem as a Markov decision process based, at least in part, on the generated one or more transitional matrices and the generated one or more reward matrices;
solve the Markov decision process, by:
determining, from solution values, a resulting state after an order action is applied; and
generating from the solution values, indices comprising a minimal state and a target state;
generate an inventory policy based at least in part, on the solution of the modeled supply chain planning problem, wherein a computer adjusts inventory levels of at least one stocking point, based at least in part, on the inventory policy and adjusts sourcing of one or more supply chain entities; and
in response to and based, at least in part, on the inventory policy, cause one or more items to be shipped from an inventory.
16. The non-transitory computer-readable medium of claim 15 , wherein the Markov decision process further comprises absorbing states, wherein the absorbing states prevent an inventory state larger than a capacity of an inventory or an unacceptable stockout level.
17. The non-transitory computer-readable medium of claim 15 , wherein the one or more reward matrices define:
one or more costs, wherein each cost of the one or more costs is associated with an action in each state of the Markov decision process; and
one or more penalties, wherein each penalty of the one or more penalties is associated with a service level violation.
18. The non-transitory computer-readable medium of claim 15 , wherein the Markov decision process further comprises a number of steps of time.
19. The non-transitory computer-readable medium of claim 15 , wherein the Markov decision process further comprises constraints, wherein the constraints further comprise an inventory reorder point and inventory target level.
20. The non-transitory computer-readable medium of claim 15 , wherein the one or more reward matrices further comprise an inventory cost or a backlog cost for a particular action and a particular state.