Online economic ordering problem for deteriorating items with limited price information

Wenqiang Dai (), Meng Zheng (), Xu Chen () and Zhuolin Yang ()
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Wenqiang Dai: University of Electronic Science and Technology of China
Meng Zheng: University of Electronic Science and Technology of China
Xu Chen: University of Electronic Science and Technology of China
Zhuolin Yang: University of Electronic Science and Technology of China

Journal of Combinatorial Optimization, No 0, 23 pages

Abstract: Abstract Traditional economic ordering model for deteriorating items assume the procurer have full information about the procurement price. In this paper, we study an online economic ordering problem for constant deteriorating rate items with limited price information under relative performance criterion of the competitive ratio (CR). We provide a simply procurement strategy as well as the optimal ordering quantity for each case. This procurement strategy is real-time and doesn’t require any forecast, i.e., upon the arrival of price, the strategy concerning procurement time and quantity only be made based on arriving price and current inventory level, with entirely arbitrary non-stationary and even adversarial price sequence arrivals. A theoretical closed-form CR is also proven to give the performance guarantee. Our numerical experiments demonstrate even better empirical performance than the corresponding proven worst-case bounds.

Keywords: Online algorithm; Deteriorating items; Price; Competitive analysis (search for similar items in EconPapers)
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DOI: 10.1007/s10878-020-00603-2

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