Stefan Minner | Technische Universität München (original) (raw)

Papers by Stefan Minner

Abstract Demand for fashion products is usually highly uncertain. Often, there is only one possib... more Abstract Demand for fashion products is usually highly uncertain. Often, there is only one possibility for procurement before the selling season. In order to improve the traditional newsvendor-type overage-underage trade-off we study a network of two expected profit maximizing retailers selling a fashion product where there is an additional opportunity for redistribution of stock during the selling season.

The impact of manufacturing flexibility on inventory investments in a distribution network consis... more The impact of manufacturing flexibility on inventory investments in a distribution network consisting of a central depot and a number of local stockpoints is investigated. The lead time of outstanding orders in the pipeline of the central depot can be shortened by the use of flexibility. Stock levels are controlled by a periodic review echelon-order-up-to-policy under service level constraints.

Multi-item lot-sizing with dynamic demand and shared warehouse capacity is a common problem in pr... more Multi-item lot-sizing with dynamic demand and shared warehouse capacity is a common problem in practice. Only small instances of this problem can be solved with exact algorithms in reasonable time. Although metaheuristic search is widely accepted to tackle large instances of combinatorial optimization problems, we are not aware of metaheuristics for multi-item single level lot-sizing with shared warehouse capacity.

Abstract Considering the available body of literature on continuous EDAs, one must state that man... more Abstract Considering the available body of literature on continuous EDAs, one must state that many important questions are still unanswered, eg: How do continuous EDAs really work, and how can we increase their efficiency further? The first question must be answered on the basis of formal models, but despite some recent results, the majority of contributions to the field is experimental. The second questionshould be answered by exploiting the insights that have been gained from formal models.

ABSTRACT Of late, much progress has been made in developing Estimation of Distribution Algorithms... more ABSTRACT Of late, much progress has been made in developing Estimation of Distribution Algorithms (EDA), algorithms that use probabilistic modelling of high quality solutions to guide their search. While experimental results on EDA behaviour are widely available, theoretical results are still rare. This is especially the case for continuous EDA. In this article, we develop theory that predicts the effect of iterated density estimation and sampling used in the Univariate Marginal Distribution Algorithm in the continuous domain (UMDAc).

This chapter serves as an introduction to estimation of distribution algorithms (EDAs). Estimatio... more This chapter serves as an introduction to estimation of distribution algorithms (EDAs). Estimation of distribution algorithms are a new paradigm in evolutionary computation. They combine statistical learning with population-based search in order to automatically identify and exploit certain structural properties of optimization problems. State-of-the-art EDAs consistently outperformclassical genetic algorithms on a broad range of hard optimization problems.

Abstract A renewable power producer who trades on a day-ahead market sells electricity under supp... more Abstract A renewable power producer who trades on a day-ahead market sells electricity under supply and price uncertainty. Investments in energy storage mitigate the associated financial risks and allow for decoupling the timing of supply and delivery. This paper introduces a model of the optimal bidding strategy for a hybrid system of renewable power generation and energy storage.

Schering AG is a pharmaceutical company that was founded in 1871 in Berlin by the pharmacist Erns... more Schering AG is a pharmaceutical company that was founded in 1871 in Berlin by the pharmacist Ernst Schering. During the past 128 years, Schering has developed into an international pharmaceutical corporation with 145 worldwide subsidiaries and partnerships. In 1998, a staff of 22,043 (44% employed in Germany) contributed to revenues of EUR 2.9 billion.

Abstract Of late, much progress has been made in developing Estimation of Distribution Algorithms... more Abstract Of late, much progress has been made in developing Estimation of Distribution Algorithms (EDA), algorithms that use probabilistic modelling of high quality solutions to guide their search. While experimental results on EDA behaviour are widely available, theoretical results are still rare. This is especially the case for continuous EDA.

Abstract We solve the uncapacitated warehouse location problem with a simple genetic algorithm an... more Abstract We solve the uncapacitated warehouse location problem with a simple genetic algorithm and find a significant influence of the numbering of warehouses on the performance of the genetic algorithm. The effect is explained by linking a decomposition result for the problem to genetic algorithm theory, and its relevance is underlined by means of an empirical study based on over 600 widely used benchmark test instances.

Abstract: In this paper we discuss the two main reverse logistics processes at the pharmaceutical... more Abstract: In this paper we discuss the two main reverse logistics processes at the pharmaceutical company Schering. Both are associated with the production of active ingredients from raw materials. Firstly, by-products are reused, because they contain valuable materials. Secondly, impure solvents are recycled or thermally utilized. We describe these reverse logistics processes and discuss their effects on production planning and inventory control.

Many industrial companies today operate under strict employment legislation and work agreements. ... more Many industrial companies today operate under strict employment legislation and work agreements. Since flexible capacity has been widely recognized as an important hedge against uncertain demand, there exist strong efforts to introduce more flexible workforce models. In this paper, we investigate the benefits of such labor flexibility and its interplay with machine flexibility from a network capacity investment perspective.

We study simulation optimization methods for the stochastic economic lot scheduling problem. In c... more We study simulation optimization methods for the stochastic economic lot scheduling problem. In contrast to prior research, we focus on methods that treat this problem as a black box. Based on a large-scale numerical study, we compare approximate dynamic programming with a global search for parameters of simple control policies.

Abstract Lateral transshipments are an effective strategy to pool inventories. We present an exac... more Abstract Lateral transshipments are an effective strategy to pool inventories. We present an exact Semi-Markov decision problem formulation for proactive and reactive transshipments in a multi-location continuous review distribution inventory system with Poisson demand and exponential replenishment lead times. In a numerical study, we investigate the benefits of proactive over different reactive transshipment rules depending on the design of the distribution network, cost parameters, and demand and supply parameters.

Abstract Motivated by data from a large European retail chain, we tackle the newsvendor problem w... more Abstract Motivated by data from a large European retail chain, we tackle the newsvendor problem with censored demand observations by a distribution-free approach based on the data-driven newsvendor model. The model estimates the optimal inventory levels as a linear function of exogenous variables, eg price or temperature. To improve the forecast accuracy we simultaneously estimate unobservable lost sales, determine the coefficients of the exogenous variables which drive demand and calculate the optimal order quantity.

Tailored for a complex application in the process industry, this article examines a multi-product... more Tailored for a complex application in the process industry, this article examines a multi-product production planning and scheduling problem with sequence-dependent setup cost and times. The manufacturing process is characterised by a two-stage structure where the sequencing problem occurs on the first level and contribution margin, holding cost, penalty cost are accounted on the second level. We present a hybrid mixed-binary optimisation model based on the general lot-sizing and scheduling problem [Fleischmann, B.

In wholesale electricity markets, prices and price volatility are primarily driven by time-varyin... more In wholesale electricity markets, prices and price volatility are primarily driven by time-varying electricity consumption and marginal generation cost that increases in electrical load. In 2009, the PJM1 market experienced average load changes from 55 to 130 gigawatts between off-and on-peak hours with hourly price averages ranging from 2to2 to 2to300 per megawatt-hour in 2009.

We consider the stochastic economic lot scheduling problem (SELSP) with lost sales and random dem... more We consider the stochastic economic lot scheduling problem (SELSP) with lost sales and random demand, where switching between products is subject to sequence-dependent setup times. We propose a solution based on simulation optimization using an iterative two-step procedure which combines global policy search with local search heuristics for the traveling salesman sequencing subproblem.

We develop an optimisation model to minimise costs for work-in-process (WIP), finished goods inve... more We develop an optimisation model to minimise costs for work-in-process (WIP), finished goods inventory (FGI), backorders, and capacity for a multi-stage production system applying a work-ahead window work release policy. Customers arrive to a make-to-order production system and have stochastic due dates. The parameters to optimise are the capacity invested at each stage, consisting of the number of machines and the processing rate (defined by a set of possible processing rates), as well as the work-ahead window.

Abstract Previous experimental work showed that newsvendors tend to order closer to mean demand t... more Abstract Previous experimental work showed that newsvendors tend to order closer to mean demand than prescribed by the normative critical fractile solution. A recently proposed explanation for this mean ordering behavior assumes that the decision maker commits random choice errors, and predicts the mean ordering pattern because there is more room to err toward mean demand than away from it. Do newsvendors exhibit mean ordering simply because they make random errors?

Abstract Demand for fashion products is usually highly uncertain. Often, there is only one possib... more Abstract Demand for fashion products is usually highly uncertain. Often, there is only one possibility for procurement before the selling season. In order to improve the traditional newsvendor-type overage-underage trade-off we study a network of two expected profit maximizing retailers selling a fashion product where there is an additional opportunity for redistribution of stock during the selling season.

The impact of manufacturing flexibility on inventory investments in a distribution network consis... more The impact of manufacturing flexibility on inventory investments in a distribution network consisting of a central depot and a number of local stockpoints is investigated. The lead time of outstanding orders in the pipeline of the central depot can be shortened by the use of flexibility. Stock levels are controlled by a periodic review echelon-order-up-to-policy under service level constraints.

Multi-item lot-sizing with dynamic demand and shared warehouse capacity is a common problem in pr... more Multi-item lot-sizing with dynamic demand and shared warehouse capacity is a common problem in practice. Only small instances of this problem can be solved with exact algorithms in reasonable time. Although metaheuristic search is widely accepted to tackle large instances of combinatorial optimization problems, we are not aware of metaheuristics for multi-item single level lot-sizing with shared warehouse capacity.

Abstract Considering the available body of literature on continuous EDAs, one must state that man... more Abstract Considering the available body of literature on continuous EDAs, one must state that many important questions are still unanswered, eg: How do continuous EDAs really work, and how can we increase their efficiency further? The first question must be answered on the basis of formal models, but despite some recent results, the majority of contributions to the field is experimental. The second questionshould be answered by exploiting the insights that have been gained from formal models.

ABSTRACT Of late, much progress has been made in developing Estimation of Distribution Algorithms... more ABSTRACT Of late, much progress has been made in developing Estimation of Distribution Algorithms (EDA), algorithms that use probabilistic modelling of high quality solutions to guide their search. While experimental results on EDA behaviour are widely available, theoretical results are still rare. This is especially the case for continuous EDA. In this article, we develop theory that predicts the effect of iterated density estimation and sampling used in the Univariate Marginal Distribution Algorithm in the continuous domain (UMDAc).

This chapter serves as an introduction to estimation of distribution algorithms (EDAs). Estimatio... more This chapter serves as an introduction to estimation of distribution algorithms (EDAs). Estimation of distribution algorithms are a new paradigm in evolutionary computation. They combine statistical learning with population-based search in order to automatically identify and exploit certain structural properties of optimization problems. State-of-the-art EDAs consistently outperformclassical genetic algorithms on a broad range of hard optimization problems.

Abstract A renewable power producer who trades on a day-ahead market sells electricity under supp... more Abstract A renewable power producer who trades on a day-ahead market sells electricity under supply and price uncertainty. Investments in energy storage mitigate the associated financial risks and allow for decoupling the timing of supply and delivery. This paper introduces a model of the optimal bidding strategy for a hybrid system of renewable power generation and energy storage.

Schering AG is a pharmaceutical company that was founded in 1871 in Berlin by the pharmacist Erns... more Schering AG is a pharmaceutical company that was founded in 1871 in Berlin by the pharmacist Ernst Schering. During the past 128 years, Schering has developed into an international pharmaceutical corporation with 145 worldwide subsidiaries and partnerships. In 1998, a staff of 22,043 (44% employed in Germany) contributed to revenues of EUR 2.9 billion.

Abstract Of late, much progress has been made in developing Estimation of Distribution Algorithms... more Abstract Of late, much progress has been made in developing Estimation of Distribution Algorithms (EDA), algorithms that use probabilistic modelling of high quality solutions to guide their search. While experimental results on EDA behaviour are widely available, theoretical results are still rare. This is especially the case for continuous EDA.

Abstract We solve the uncapacitated warehouse location problem with a simple genetic algorithm an... more Abstract We solve the uncapacitated warehouse location problem with a simple genetic algorithm and find a significant influence of the numbering of warehouses on the performance of the genetic algorithm. The effect is explained by linking a decomposition result for the problem to genetic algorithm theory, and its relevance is underlined by means of an empirical study based on over 600 widely used benchmark test instances.

Abstract: In this paper we discuss the two main reverse logistics processes at the pharmaceutical... more Abstract: In this paper we discuss the two main reverse logistics processes at the pharmaceutical company Schering. Both are associated with the production of active ingredients from raw materials. Firstly, by-products are reused, because they contain valuable materials. Secondly, impure solvents are recycled or thermally utilized. We describe these reverse logistics processes and discuss their effects on production planning and inventory control.

Many industrial companies today operate under strict employment legislation and work agreements. ... more Many industrial companies today operate under strict employment legislation and work agreements. Since flexible capacity has been widely recognized as an important hedge against uncertain demand, there exist strong efforts to introduce more flexible workforce models. In this paper, we investigate the benefits of such labor flexibility and its interplay with machine flexibility from a network capacity investment perspective.

We study simulation optimization methods for the stochastic economic lot scheduling problem. In c... more We study simulation optimization methods for the stochastic economic lot scheduling problem. In contrast to prior research, we focus on methods that treat this problem as a black box. Based on a large-scale numerical study, we compare approximate dynamic programming with a global search for parameters of simple control policies.

Abstract Lateral transshipments are an effective strategy to pool inventories. We present an exac... more Abstract Lateral transshipments are an effective strategy to pool inventories. We present an exact Semi-Markov decision problem formulation for proactive and reactive transshipments in a multi-location continuous review distribution inventory system with Poisson demand and exponential replenishment lead times. In a numerical study, we investigate the benefits of proactive over different reactive transshipment rules depending on the design of the distribution network, cost parameters, and demand and supply parameters.

Abstract Motivated by data from a large European retail chain, we tackle the newsvendor problem w... more Abstract Motivated by data from a large European retail chain, we tackle the newsvendor problem with censored demand observations by a distribution-free approach based on the data-driven newsvendor model. The model estimates the optimal inventory levels as a linear function of exogenous variables, eg price or temperature. To improve the forecast accuracy we simultaneously estimate unobservable lost sales, determine the coefficients of the exogenous variables which drive demand and calculate the optimal order quantity.

Tailored for a complex application in the process industry, this article examines a multi-product... more Tailored for a complex application in the process industry, this article examines a multi-product production planning and scheduling problem with sequence-dependent setup cost and times. The manufacturing process is characterised by a two-stage structure where the sequencing problem occurs on the first level and contribution margin, holding cost, penalty cost are accounted on the second level. We present a hybrid mixed-binary optimisation model based on the general lot-sizing and scheduling problem [Fleischmann, B.

In wholesale electricity markets, prices and price volatility are primarily driven by time-varyin... more In wholesale electricity markets, prices and price volatility are primarily driven by time-varying electricity consumption and marginal generation cost that increases in electrical load. In 2009, the PJM1 market experienced average load changes from 55 to 130 gigawatts between off-and on-peak hours with hourly price averages ranging from 2to2 to 2to300 per megawatt-hour in 2009.

We consider the stochastic economic lot scheduling problem (SELSP) with lost sales and random dem... more We consider the stochastic economic lot scheduling problem (SELSP) with lost sales and random demand, where switching between products is subject to sequence-dependent setup times. We propose a solution based on simulation optimization using an iterative two-step procedure which combines global policy search with local search heuristics for the traveling salesman sequencing subproblem.

We develop an optimisation model to minimise costs for work-in-process (WIP), finished goods inve... more We develop an optimisation model to minimise costs for work-in-process (WIP), finished goods inventory (FGI), backorders, and capacity for a multi-stage production system applying a work-ahead window work release policy. Customers arrive to a make-to-order production system and have stochastic due dates. The parameters to optimise are the capacity invested at each stage, consisting of the number of machines and the processing rate (defined by a set of possible processing rates), as well as the work-ahead window.

Abstract Previous experimental work showed that newsvendors tend to order closer to mean demand t... more Abstract Previous experimental work showed that newsvendors tend to order closer to mean demand than prescribed by the normative critical fractile solution. A recently proposed explanation for this mean ordering behavior assumes that the decision maker commits random choice errors, and predicts the mean ordering pattern because there is more room to err toward mean demand than away from it. Do newsvendors exhibit mean ordering simply because they make random errors?