Robust parameter design of inventory policy considering the risk preference of decision makers

Abstract

Aiming at reducing the risk in inventory management of supply chain system suffering from the influence of uncertainties, we propose a strategy to analyse the optimal inventory policy considering different risk preference of decision makers. The proposed method is a combination of the mean-conditional value-at-risk and the response surface model. From the perspective of robust optimization, the proposed method is adopted to solve the inventory control problems in a multi-echelon supply chain system, the effectiveness of the proposed method is verified in the simulation model. Furthermore, the comparison analysis between the proposed method and the dual-response surface method is conducted in this paper, and the comparison results shows the superiority of the proposed method in improving the robustness of supply chain system.