Stochastic setup-cost inventory model with backorders and quasiconvex cost functions

DOI10.1017/S0269964818000335MaRDI QIDQ5070865zbMATH OpenOpenAlexWikidataFDO

Authors Eugene A. Feinberg, Yan Liang

Publication date 14 April 2022

Published in Probability in the Engineering and Informational Sciences (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1705.06814

zbMATH Keywords

inventory control\((s,S)\) policiesrelative value functionsaverage-cost optimality equations

Mathematics Subject Classification ID

Inventory, storage, reservoirs (90B05) Markov and semi-Markov decision processes (90C40)

Abstract: In this paper we study a periodic-review single-commodity setup-cost inventory model with backorders and holding/backlog costs satisfying quasiconvexity assumptions. We show that the Markov decision process for this inventory model satisfies the assumptions that lead to the validity of optimality equations for discounted and average-cost problems and to the existence of optimal $(s,S)$ policies. In particular, we prove the equicontinuity of the family of discounted value functions and the convergence of optimal discounted lower thresholds to the optimal average-cost one for some sequences of discount factors converging to $1.$ If an arbitrary nonnegative amount of inventory can be ordered, we establish stronger convergence properties: (i) the optimal discounted lower thresholds $s_{a}lpha$ converge to optimal average-cost lower threshold $s;$ and (ii) the discounted relative value functions converge to average-cost relative value function. These convergence results previously were known only for subsequences of discount factors even for problems with convex holding/backlog costs. The results of this paper hold for problems with deterministic positive lead times.

Recommendations

• Inventory models with general backorder costs
• On the convergence of optimal actions for Markov decision processes and the optimality of \((s,S)\) inventory policies
• Average cost single-stage inventory models: an analysis using a vanishing discount approach
• Inventory models with Markovian demands and cost functions of polynomial growth
• On the optimality equation for average cost Markov decision processes and its validity for inventory control

Cites work

• scientific article; zbMATH DE number 2126322 (Why is no real title available?)
• scientific article; zbMATH DE number 54039 (Why is no real title available?)
• scientific article; zbMATH DE number 3205068 (Why is no real title available?)
• scientific article; zbMATH DE number 3322720 (Why is no real title available?)
• A simple proof for optimality of (s, S) policies in infinite-horizon inventory systems
• Adaptive Markov control processes
• Asymptotic optimality of constant-order policies for lost sales inventory models with large lead times
• Average Optimality in Dynamic Programming with General State Space
• Average cost Markov decision processes with weakly continuous transition probabilities
• Average cost single-stage inventory models: an analysis using a vanishing discount approach
• Berge's theorem for noncompact image sets
• Computing Optimal (s, S) Inventory Policies
• Coordinating Inventory Control and Pricing Strategies with Random Demand and Fixed Ordering Cost: The Finite Horizon Case
• Coordinating Inventory Control and Pricing Strategies with Random Demand and Fixed Ordering Cost: The Infinite Horizon Case
• Examples concerning Abel and Cesàro limits
• Foundations of inventory management
• Markovian demand inventory models
• On (s, S) Policies
• On the Opimality of $( {s,S} )$ Inventory Policies: New Conditions and a New Proof
• On the convergence of optimal actions for Markov decision processes and the optimality of \((s,S)\) inventory policies
• On the optimality equation for average cost Markov decision processes and its validity for inventory control
• Optimality Inequalities for Average Cost Markov Decision Processes and the Stochastic Cash Balance Problem
• Partially observable total-cost Markov decision processes with weakly continuous transition probabilities
• Structure of optimal policies to periodic-review inventory models with convex costs and backorders for all values of discount factors
• The classical average-cost inventory models of Iglehart and Veinott-Wagner revisited

Cited in

(4)

• Inventory models with general backorder costs
• Interchanging fill rate constraints and backorder costs in inventory models
• On the convergence of optimal actions for Markov decision processes and the optimality of \((s,S)\) inventory policies
• An inventory model with single price break and convexity of cost function

This page was built for publication: Stochastic setup-cost inventory model with backorders and quasiconvex cost functions

Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q5070865)