A dynamic stochastic stock-cutting problem

DOI10.1287/OPRE.46.5.690MaRDI QIDQ2781110zbMATH OpenOpenAlexFDO

Authors Elena V. Krichagina, Rodrigo Rubio, Lawrence M. Wein, Michael Taksar

Publication date 18 March 2002

Published in Operations Research (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1287/opre.46.5.690

Mathematics Subject Classification ID

Inventory, storage, reservoirs (90B05) Queues and service in operations research (90B22) Deterministic scheduling theory in operations research (90B35)

Review text

We consider a stock cutting problem for a paper plant that produces sheets of various sizes for a finished goods inventory that services random customer demand. The controller decides when to shut down and restart the paper machine and how to cut completed paper rolls into sheets of paper. The objective is to minimize long-run expected average costs related to paper waste (from inefficient cutting), shutdowns, backordering, and holding finished goods inventory. A two-step procedure (linear programming in the first step and Brownian control in the second step) is developed that leads to an effective, but suboptimal, solution. The linear program greatly restricts the number of cutting configurations that can be employed in the Brownian analysis, and hence the proposed policy is easy to implement, and the resulting production process is considerably simplified. In an illustrative numerical example using representative data from an industrial facility, the proposed policy outperforms several policies that use a larger number of cutting configurations. Finally, we discuss some alternative production settings where this two-step procedure may be applicable.

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