Simultaneous Decision Making for Stochastic Multi-echelon Inventory
Optimization with Deep Neural Networks as Decision Makers
- URL: http://arxiv.org/abs/2006.05608v2
- Date: Tue, 23 Mar 2021 10:47:26 GMT
- Title: Simultaneous Decision Making for Stochastic Multi-echelon Inventory
Optimization with Deep Neural Networks as Decision Makers
- Authors: Mohammad Pirhooshyaran, Lawrence V. Snyder
- Abstract summary: We propose a framework that uses deep neural networks (DNN) to optimize inventory decisions in complex multi-echelon supply chains.
Our method is suitable for a wide variety of supply chain networks, including general topologies that may contain both assembly and distribution nodes.
- Score: 0.7614628596146599
- License: http://arxiv.org/licenses/nonexclusive-distrib/1.0/
- Abstract: We propose a framework that uses deep neural networks (DNN) to optimize
inventory decisions in complex multi-echelon supply chains. We first introduce
pairwise modeling of general stochastic multi-echelon inventory optimization
(SMEIO). Then, we present a framework which uses DNN agents to directly
determine order-up-to levels between any adjacent pair of nodes in the supply
chain. Our model considers a finite horizon and accounts for the initial
inventory conditions. Our method is suitable for a wide variety of supply chain
networks, including general topologies that may contain both assembly and
distribution nodes, and systems with nonlinear cost structures. We first
numerically demonstrate the effectiveness of the method by showing that its
solutions are close to the optimal solutions for single-node and serial supply
chain networks, for which exact methods are available. Then, we investigate
more general supply chain networks and find that the proposed method performs
better in terms of both objective function values and the number of
interactions with the environment compared to alternate methods.
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