Optimal inventory control in a multi-period newsvendor problem with non-stationary demand. Issue 1 (January 2015)

• Record Type: Journal Article
• Authors: Kim, Gitae; Wu, Kan; Huang, Edward
• Is Part Of: Advanced engineering informatics. Volume 29:Issue 1(2015:Jan.)
• Page Start: 139
• Page End: 145
• Publication Date: 2015-01
• Subjects: Computer-aided engineering -- Periodicals; Engineering -- Data processing -- Periodicals; 620.00285
• DOI: 10.1016/j.aei.2014.12.002
• Languages: English
• ISSNs: 1474-0346

Abstract

<abstract xml:lang="en" abstract-type="author" id="ab005"> <title id="st075">Abstract</title> <sec> <p id="sp0005">The optimal control of inventory in supply chains plays a key role in the competiveness of a corporation. The inventory cost can account for half of company's logistics cost. The classical inventory models, e.g., newsvendor and EOQ models, assume either a single or infinite planning periods. However, these models may not be applied to perishable products which usually have a certain shelf life. To optimize the total logistic cost for perishable products, this paper presents a multi-period newsvendor model, and the problem is formulated as a multi-stage stochastic programming model with integer recourse decisions. We extend the progressive hedging method to solve the model efficiently. A numerical example and its sensitivity analysis are demonstrated.</p> </sec> </abstract>