Optimality of Base-Stock and (s, S) Policies for Inventory Problems with Information Delays

A. Bensoussan, M. Çakanyildirim and Suresh Sethi
Additional contact information
A. Bensoussan: University of Texas at Dallas
M. Çakanyildirim: University of Texas at Dallas

Journal of Optimization Theory and Applications, 2006, vol. 130, issue 2, No 1, 153-172

Abstract: Abstract Information delays exist when the most recent inventory information available to the inventory manager (IM) is dated; namely, the IM observes only the inventory level of an earlier period. We introduce information delays into the standard multiperiod stochastic inventory problem with backorders. We consider two types of information delays: (i) a constant delay and (ii) a random delay. We define an appropriate reference inventory position, which is a sufficient statistics for finding the optimal order quantity. We show that the optimal ordering policy is of base-stock type with respect to the reference inventory position and is of (s, S) type if there is also a fixed cost of ordering.

Keywords: Information delay; partial observations; stochastic inventory problem (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s10957-006-9106-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joptap:v:130:y:2006:i:2:d:10.1007_s10957-006-9106-8

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10957/PS2

DOI: 10.1007/s10957-006-9106-8

Access Statistics for this article

Journal of Optimization Theory and Applications is currently edited by Franco Giannessi and David G. Hull

More articles in Journal of Optimization Theory and Applications from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().