Abstract for: Control Formulations for a Stock Management Problem with a Delay in Measuring and Reporting
Stock management task is a central issue in System Dynamics. The difficulty associated with managing the task is usually caused by the delays positioned at different places within the task. There are delays in measuring and reporting the current values of the stock, delays in making decisions, and delays between the control decisions and their results. Most studies focus on the delays placed between the control decisions and their results. However, only a very limited number of studies were carried out regarding the other positions of delay. The optimal ordering policy introduced by Bensoussan et al. (2006) and the measurement delay heuristic introduced by Yasarcan (2011) are suggested to be used in the presence of a delay caused by measurement and reporting. In this study, the performance of the measurement delay heuristic proposed by Yasarcan (2011) is compared to the benchmark performance obtained from the optimal ordering policy of Bensoussan et al. (2006). The measurement delay heuristic generates exactly the same dynamics as the optimal ordering policy in a stationary environment. Furthermore, the measurement delay heuristic is robust to the violations of the assumption that states that the loss from the stock has a stationary mean.