Optimal Ordering Policy for Inventory Systems with Quantity-Dependent Setup Costs
From MaRDI portal
Abstract: We consider a continuous-review inventory system in which the setup cost of each order is a general function of the order quantity and the demand process is modeled as a Brownian motion with a positive drift. Assuming the holding and shortage cost to be a convex function of the inventory level, we obtain the optimal ordering policy that minimizes the long-run average cost by a lower bound approach. To tackle some technical issues in the lower bound approach under the quantity-dependent setup cost assumption, we establish a comparison theorem that enables one to prove the global optimality of a policy by examining a tractable subset of admissible policies. Since the smooth pasting technique does not apply to our Brownian inventory model, we also propose a selection procedure for computing the optimal policy parameters when the setup cost is a step function.
Recommendations
- Optimal policy for inventory systems with capacity commitment and fixed ordering costs
- Optimal policies for inventory systems with concave ordering costs
- Optimal Ordering Policies for a Continuous Time, Deterministic Inventory Model
- Ordering policies for periodic-review inventory systems with quantity-dependent fixed costs
- Optimal inventory policies for an economic order quantity model with decreasing cost functions
- Optimal policies for inventory systems with separate delivery-request and order-quantity decisions
- ON THE STRUCTURE OF OPTIMAL ORDERING POLICIES FOR STOCHASTIC INVENTORY SYSTEMS WITH MINIMUM ORDER QUANTITY
- scientific article; zbMATH DE number 1275471
- The optimum ordering policy for a dynamic inventory model with discrete demand
- Optimal ordering and transfer policy for an inventory with stock dependent demand
Cited in
(25)- An approximation scheme for impulse control with random reaction periods
- Ergodic inventory control with diffusion demand and general ordering costs
- Optimal order quantity in the presence of strategic customers
- Management of online server congestion using optimal demand throttling
- Optimal material ordering policy and allocation rule for a manufacturer making multiple products
- Optimal pricing, production, and inventory for deteriorating items under demand uncertainty: the finite horizon case
- Irreversible investment with fixed adjustment costs: a stochastic impulse control approach
- An optimal order policy for items with inventory-level-dependent demand and fixed lifetime
- Optimal Ordering and Transfer Policy for an Inventory System with Time Dependent Holding Cost and Three Component Demand Rate
- Note: A Simple Heuristic for Serial Inventory Systems with Fixed Order Costs
- An optimal ordering policy of a system subject to shocks
- Cost minimising order schedules for a capacitated inventory system
- A replenishment inventory model with a stock-dependent demand and age-stock-dependent cost functions in a random environment
- Technical Note—On the Optimality of Reflection Control
- Impulse control with discontinuous setup costs: discounted cost criterion
- A weak convergence approach to inventory control using a long-term average criterion
- Optimal Reorder Periods for an Inventory System with Variable Costs of Ordering
- Optimal Ordering Policies for a Continuous Time, Deterministic Inventory Model
- Two-Sided Singular Control of an Inventory with Unknown Demand Trend
- Optimal ordering and pricing policy for an inventory system with trial periods
- Optimal drift rate control and two-sided impulse control for a Brownian system with the long-run average criterion
- Optimal policy for two-stage Brownian inventory systems under the long-run average cost criterion
- Long-term average impulse control with mean field interactions
- Long-term average impulse and singular control of a growth model with two revenue sources
- A production-inventory problem with price-sensitive demand
This page was built for publication: Optimal Ordering Policy for Inventory Systems with Quantity-Dependent Setup Costs
Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q4595953)
