Robust Inventory System Optimization Based on Simulation and Multiple Criteria Decision Making

Abstract

Inventory management in retailers is difficult and complex decision making process which is related to the conflict criteria, also existence of cyclic changes and trend in demand is inevitable in many industries. In this paper, simulation modeling is considered as efficient tool for modeling of retailer multiproduct inventory system. For simulation model optimization, a novel multicriteria and robust surrogate model is designed based on multiple attribute decision making (MADM) method, design of experiments (DOE), and principal component analysis (PCA). This approach as a main contribution of this paper, provides a framework for robust multiple criteria decision making under uncertainty