Optimization of simulated inventory systems: OptQuest and alternatives

This article illustrates simulation optimization through an (s, S) inventory manage- ment system. In this system, the goal function to be minimized is the expected value of speci…c inventory costs. Moreover, speci…c constraints must be satis…ed for some random simulation responses, namely the service or …ll rate, and for some determin- istic simulation inputs, namely the constraint s <S. Results are reported for three optimization methods, including the popular OptQuest method. The optimality of the resulting solutions is tested through the so-called Karesh-Kuhn-Tucker (KKT) conditions