Decision making on stock levels in cases of uncertain demand rate

DOI10.1016/S0377-2217(87)80150-9MaRDI QIDQ1097159zbMATH OpenFDO

Authors Jovan B. Popović

Publication date 1987

Published in European Journal of Operational Research (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/S0377-2217(87)80150-9

zbMATH Keywords

Bayesian approachperiodic replenishmentuncertain demand rate

Mathematics Subject Classification ID

Inventory, storage, reservoirs (90B05)

Review text

Inventory control is a typical problem of decision making. In this paper a periodic replenishment of stock, the spare parts being of one kind, is discussed for some cases when the demand rate is uncertain. The first decision, before all others in the sequence, is done by assuming an a priori distribution of demand rate. In time, as the demand process goes on, corrections of parameters of the a priori distribution are made according to the accumulated knowledge about past demand. This Bayesian approach to decision making based on learning about the uncertain demand rate is known for the case when the demand rate is unknown but constant. It is shown that this same approach can be used in some cases when the demand rate is unknown and not constant. Results are given and used for inventory control.

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Cites work

• A Bayesian approach to demand estimation and inventory provisioning
• Bayes adaptive control of two-echelon inventory systems, II: The multistation case
• Bayes adaptive control of two‐echelon inventory systems i: development for a special case of one‐station lower echelon and monte carlo evaluation
• Bayes sequential design of stock levels
• scientific article; zbMATH DE number 3223982 (Why is no real title available?)

Cited in

(8)

• Style goods pricing with demand learning
• Information and decision in optimal inventory processes
• Applying Bayesian methodology with a uniform prior to the single period inventory model
• On the performance of binomial and beta-binomial models of demand forecasting for multiple slow-moving inventory items
• A belief-rule-based inference method for inventory control
• scientific article; zbMATH DE number 1275472 (Why is no real title available?)
• A Bayesian approach to a dynamic inventory model under an unknown demand distribution
• Fifty years of inventory research from a forecasting perspective

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