Simultaneous simulation experiments and nested partition for discrete resource allocation in supply chain management

Abstract

Discrete resource allocation is a common problem in supply chain management. However, stochastic discrete resource allocation problems are difficult to solve. We propose a new algorithm for solving such difficult problems. The algorithm integrates the nested partitions method with an optimal computing budget allocation method. The resulting hybrid algorithm retains the global perspective of the nested partitions method and the efficient simultaneous simulation experiments of the optimal computing budget allocation. Numerical results demonstrate that the hybrid algorithm can be effectively used for a large-scale discrete resource allocation problem.