On Optimality of a Class of Dynamic Myopic Policies for Continuous-Time Replenishment with Periodic Updates

Konstantin Kogan () and Matan Shnaiderman
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Konstantin Kogan: Bar-Ilan University
Matan Shnaiderman: Bar-Ilan University

Journal of Optimization Theory and Applications, 2011, vol. 151, issue 1, No 12, 209 pages

Abstract: Abstract This paper is motivated by inventory problems arising in supply chains characterized by continuous replenishment programs based on information exchanged (reviewed) only intermittently between a manufacturing system (supplier) and a customer (retailer). When the replenishment is once-per-period, rather than at any point of time, a well-known result is the optimality of the so-called myopic base-stock policy. We generalize the notion of the base-stock policy and study the optimality of the corresponding class of dynamic myopic policies. We identify a myopic policy and prove that although the replenishment rule is dynamic, this policy is optimal when the demands are stationary and the number of review periods tends to infinity.

Keywords: Inventory management; Dynamic programming; Continuous replenishment (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1007/s10957-011-9855-x

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