Neuroevolutionary Inventory Control in Multi-Echelon Systems

  • Authors:
  • Steve D. Prestwich;S. Armagan Tarim;Roberto Rossi;Brahim Hnich

  • Affiliations:
  • Cork Constraint Computation Centre, Ireland;Operations Management Division, Nottingham University Business School, Nottingham, UK;Logistics, Decision and Information Sciences Group, Wageningen UR, The Netherlands;Faculty of Computer Science, Izmir University of Economics, Turkey

  • Venue:
  • ADT '09 Proceedings of the 1st International Conference on Algorithmic Decision Theory
  • Year:
  • 2009

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Abstract

Stochastic inventory control in multi-echelon systems poses hard problems in optimisation under uncertainty. Stochastic programming can solve small instances optimally, and approximately solve large instances via scenario reduction techniques, but it cannot handle arbitrary nonlinear constraints or other non-standard features. Simulation optimisation is an alternative approach that has recently been applied to such problems, using policies that require only a few decision variables to be determined. However, to find optimal or near-optimal solutions we must consider exponentially large scenario trees with a corresponding number of decision variables. We propose a neuroevolutionary approach: using an artificial neural network to approximate the scenario tree, and training the network by a simulation-based evolutionary algorithm. We show experimentally that this method can quickly find good plans.