Document Type

Research Paper

Publication Date

2012

Abstract

The design and planning of major material handling systems belongs to the class of systems design problems under uncertainty. The overall structure of the system is decided during the current design stage, while the values of the future conditions and the future planning decisions are not known with certainty. Typically the future uncertainty is modeled through a number of scenarios and each scenario has an individual timediscounted total system cost. The overall performance of the material handling system is characterized by the distribution of these scenario costs. The central tendency of the cost distribution is almost always computed as the expected value of the distribution. Several alternatives can be used for the dispersion of the distribution such as the standard deviation and variance. In this study the standard deviation of the cost distribution is used as the measure of the risk of the system. The goal is to identify all configurations of the material handling system that are Pareto optimal with respect to the trade off between the expected value and the standard deviation of the costs; such Pareto-optimal configurations are also called efficient. The final selection of the material handling system for implementation can then be made based on the Pareto graph and other considerations such as the risk preferences of the system owner.

Comments

Paper 11

Publication Title

Progress in Material Handling Research: 2012

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