SOS - A QUANTILE ESTIMATION PROCEDURE FOR DYNAMIC LOT-SIZING PROBLEMS

This paper reviews some of the current approaches available for comput ing the demand quantiles required to plan the procurement of items wit h stochastic non-stationary demands. The paper first describes the sto chastic single-item lot-sizing problem considered and then presents a practical solution approach based on a dynamic lot-sizing model. Three methods available to compute demand quantiles are then reviewed and a new procedure based on smoothed order statistics (SOS) is proposed. F inally, the behaviour of these estimation methods, when used to solve single-item lot-sizing problems with non-stationary stochastic demands , is studied by simulation.