Inventory management traditionally assumes the precise knowledge of the underlying demand distribution and a risk-neutral manager. New product introduction does not fit this framework because (i) not enough information is available to compute probabilities and (ii) managers are generally risk-averse. In this work, we analyze the value of information for two-stage inventory management in a … Read more
In this work, we investigate the value of information when the decision-maker knows whether a perishable product will be in high, moderate or low demand before placing his order. We derive optimality conditions for the probability of the baseline scenario under symmetric distributions and analyze the impact of the cost parameters on simulation experiments. Our … Read more
In this work, a semi-obnoxious facility must be located in the Euclidean plane to give service to a group of customers. Simultaneously, a set of populated areas, with shapes approximated via polygons, must be protected from the negative effects derived from that facility. The problem is formulated as a margin maximization model, following a strategy … Read more
This paper presents a robust branch-cut-and-price algorithm for the Heterogeneous Fleet Vehicle Routing Problem (HFVRP), vehicles may have various capacities and fixed costs. The columns in the formulation are associated to $q$-routes, a relaxation of capacitated elementary routes that makes the pricing problem solvable in pseudo-polynomial time. Powerful new families of cuts are also proposed, … Read more
We propose tractable replenishment policies for a multi-period, single product inventory control problem under ambiguous demands, that is, only limited information of the demand distributions such as mean, support and deviation measures are available. We obtain the parameters of the tractable replenishment policies by solving a deterministic optimization problem in the form of second order … Read more
We consider a revenue management model for pricing a product line with several customer segments under the assumption that customers’ product choices are determined entirely by their reservation prices. We highlight key mathematical properties of the maximum utility model and formulate it as a mixed-integer programming problem, design heuristics and valid cuts. We further present … Read more
We describe an optimization tool for a multistage production process for rectangular steel plates. The problem we solve yields a production design (or plan) for rectangular plate products in a steel plant, i.e., a detailed list of operational steps and intermediate products on the way to producing steel plates. We decompose this problem into subproblems … Read more
The United States Postal Service (USPS) delivers more than 200 billion items per year. Transporting these items in a timely and cost-efficient way is a key issue if USPS is to meet its service and financial goals. The Highway Corridor Analytic Program (HCAP) is a tool that aids transportation analysts in identifying cost saving opportunities … Read more
The objective of this article is to study the effect of different types of censored sampling schemes on the estimation of the unknown parameter for Rayleigh distribution. The censored sampling schemes namely; type-I, type-II and progressive type-II censored sampling are to be considered. The comparisons made between the samples are based on the Fisher information, … Read more
We propose a novel optimization model for risk-averse investors to obtain robust solutions for portfolio allocation problems. Unlike related models in the literature, no historical data or statistical estimation techniques are used to compute the parameters of the model. Instead, the parameters are directly obtained from current prices of options on the assets being considered. … Read more