 Inventory management with random supply and imperfect information: A hidden Markov modelKenan Arifoglu and Süleyman Özekici International Journal of Production Economics, 2011, vol. 134, issue 1, 123-137 Abstract: In most of the papers on inventory models operating in a random environment, the state of the environment in each period is assumed to be fully observed with perfect information. However, this assumption is not realistic in most real-life situations and we provide a remedy in this paper by assuming that the environment is only partially observed with imperfect information. We accomplish this by analyzing two formulations of single-item models with periodic-review and random supply in a random environment. In the first one, supply is random due to random capacity of production and random availability of transportation. We show that state-dependent base-stock policy is optimal if the capacity and all costs are observed, while demand and availability are unobserved. In the second model, we consider a model with random availability only with fixed-ordering cost. We show that state-dependent (s,S) policy is optimal if the availability process is observable. Keywords: Random; supply; Random; environment; Imperfect; information; Base-stock; policy; Dynamic; programming; Sufficient; statistics; POMDP (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:134:y:2011:i:1:p:123-137 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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