Cores of inventory centralization games (Q1566890): Difference between revisions

In this paper the authors present a model of a centralized inventory distribution system for a set of stores whose demand is stochastic and the model assumes an option of centralized ordering and inventory with holding and penalty costs only. A cooperative inventory centralization game model examines the cost sharing problem and offers the concept of a core as a direct model of the notion of stability. See also \textit{B. C. Hartman} and \textit{M. Dror} [Nav. Res. Logist. 43, 549-561 (1996; Zbl 0846.90033)]. An allocation from the core promises the stability and perhaps insures the existence of the joint enterprise. In this paper, the authors find out the conditions under which such an inventory centralization game has a nonempty core and proves the existence of a nonempty core for demands with symmetric distributions and joint multivariate normal distribution. The equivalence of four different nonempty core conditions for the Newsboy problem are established and their efficacy for discrete iid demands are demonstrated.