Stochastic Multiproduct Inventory Models with Limited Storage

D. Beyer, Suresh Sethi and R. Sridhar
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D. Beyer: Hewlett-Packard Laboratories
R. Sridhar: i2 Technologies

Journal of Optimization Theory and Applications, 2001, vol. 111, issue 3, No 5, 553-588

Abstract: Abstract This paper studies multiproduct inventory models with stochastic demands and a warehousing constraint. Finite horizon as well as stationary and nonstationary discounted-cost infinite-horizon problems are addressed. Existence of optimal feedback policies is established under fairly general assumptions. Furthermore, the structure of the optimal policies is analyzed when the ordering cost is linear and the inventory/backlog cost is convex. The optimal policies generalize the base-stock policies in the single-product case. Finally, in the stationary infinite-horizon case, a myopic policy is proved to be optimal if the product demands are independent and the cost functions are separable.

Keywords: Multiproduct inventory model; warehousing constraints; dynamic programming; finite and infinite horizons; generalized base-stock policies; myopic policies (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (6)

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DOI: 10.1023/A:1012649927844

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