Faculty Publications

Title

Concave minimization heuristic for optimal pooling of customers with correlated demands

Document Type

Conference

Journal/Book/Conference Title

Proceedings - Annual Meeting of the Decision Sciences Institute

Volume

2

First Page

957

Last Page

959

Abstract

This paper shows that complete pooling of all resources in a single service center is not optimal when demands are correlated. A concave minimization model is developed to exploit demand correlations for grouping customers such that the sum of the standard deviations over all groups is minimized for a given service level. A heuristic solution method is developed to reduce the number of variables and nonlinearity of the model.

Original Publication Date

12-1-1996

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