Approximate solutions and cost error bounds for quantity flexibility replenishment

Stuart X. Zhu

International Journal of Production Economics, 2017, vol. 193, issue C, 306-315

Abstract: Under an environment with quantity flexibility replenishment, we explore the approximate solutions to determine ordering quantities when the demand is correlated with dynamic forecast updating. Moreover, we show the optimality of the myopic policy. We further develop the corresponding cost error bounds to evaluate the performance of the approximate solutions. Extensive numerical experiments demonstrate that our approximate solution can achieve a lower cost performance compared with other bounds.

Keywords: Approximation; Bounds; Quantity flexibility; Stochastic dynamic programming (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:193:y:2017:i:c:p:306-315

DOI: 10.1016/j.ijpe.2017.07.022

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