An economic order quantity stochastic dynamic optimization model in a logistic 4.0 environment

Abstract

This paper proposes a stock dynamic sizing optimization under the Logistic 4.0 environment. The safety stock is conceived to fill up the demand variability, providing continuous stock availability. Logistic 4.0 and the smart factory topics are considered. It focuses on vertical integration to implement flexible and reconfigurable smart production systems using the information system integration in order to optimize material flow in a 4.0 full-service approach. The proposed methodology aims to reduce the occurring stock-out events through a link among the wear-out items rate and the downstream logistic demand. The failure rate items trend is obtained through life-cycle state detection by a curve fitting technique. Therefore, the optimal safety stock size is calculated and then validated by an auto-tuning iterative modified algorithm. In this study, the reorder time has been optimized. The case study refers to the material management of a very high-speed train.