Name
Abstract | ||
|---|---|---|
In many inventory control contexts, inventory levels are only partially (i.e., not fully) observed. This may be due to nonobservation of demand, spoilage, misplacement, or theft of inventory. We study a discrete-time periodic-review inventory system where the unmet demand is backordered. When the inventory level is nonnegative, the inventory manager does not know the exact inventory level. Otherwise, inventory shortages occur, and the inventory manager issues rain checks to customers. The shortages are fully observed via the rain checks. The inventory manager determines the order quantity based on the partial information on the inventory level. The objective is to minimize the expected total discounted cost over an infinite horizon. The dynamic programming formulation of this problem has an infinite dimensional state space. We use the methodology of the unnormalized probability to establish the existence of an optimal feedback policy when the periodic cost has linear growth. Moreover, uniqueness and continuity of the solution to dynamic programming equations are proved when the discount factor is sufficiently small. |
Year | DOI | Venue |
|---|---|---|
2008 | 10.1137/070688663 | SIAM J. Control and Optimization |
Keywords | Field | DocType |
dynamic programming formulation,partially observed inventory systems,dynamic programming equation,expected total discounted cost,inventory manager issues rain,inventory level,inventory control context,inventory shortage,rain checks,exact inventory level,inventory manager,discrete-time periodic-review inventory system,optimal control,dynamic programming,incomplete information | Mathematical optimization,Inventory theory,Perpetual inventory,Economic order quantity,Operations research,Cycle count,Inventory control,Inventory valuation,Stock-taking,Mathematics,Stochastic control | Journal |
Volume | Issue | ISSN |
47 | 5 | 0363-0129 |
Citations | PageRank | References |
3 | 0.45 | 1 |
Authors | ||
5 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Alain Bensoussan | 1 | 367 | 170.17 |
| Metin Çakanyildirim | 2 | 150 | 12.59 |
| J. Adolfo Minjárez-Sosa | 3 | 34 | 9.00 |
| Suresh Sethi | 4 | 1215 | 255.98 |
| Ruixia Shi | 5 | 11 | 3.64 |