The Optimal Order Policy for a Capacitated Multiple Product Inventory System Under Symmetry

Yi Feng (), Shaoxiang Chen () and Wenqiang Dai ()
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Yi Feng: School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, P. R. China, 610054, P. R. China
Shaoxiang Chen: Nanyang Business School, Nanyang Technological University, Singapore, 639798, Singapore
Wenqiang Dai: School of Management and Economics, University of Electronic Science and Technology of China, Chengdu, P. R. China, 610054, P. R. China

Asia-Pacific Journal of Operational Research (APJOR), 2015, vol. 32, issue 02, 1-17

Abstract: Although many researches have conjectured the optimality of the hedging point policy for the multiple-product stochastic capacitated periodic review problem, it is still a challenge to prove the hypothesis. This paper considers a special case of the capacitated multiple-product periodic review problem where stochastic demand distribution, production rate, unit production cost and periodic expected inventory cost are the same for all different products. For this symmetric problem, we prove an optimal policy where ordering and non-ordering regions for every product are defined. Our research provides significant implications to the characterization of the optimal policy for the general problem.

Keywords: Stochastic programming; multiple-product; capacitated; periodic review; optimality (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S0217595915500050

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