Concave minimization heuristic for optimal pooling of customers with correlated demands
Proceedings - Annual Meeting of the Decision Sciences Institute
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
Tyagi, Rajesh and Das, Chandrasekhar, "Concave minimization heuristic for optimal pooling of customers with correlated demands" (1996). Faculty Publications. 4079.