Average cost optimality in inventory models with dynamic information delays

Alain Bensoussan; Metin Cakanyildirim; Suresh P. Sethi; Mingzheng Wang; Hanqin Zhang

doi:10.1109/TAC.2011.2144650

Author(s)

Alain Bensoussan
Metin Cakanyildirim
Suresh P. Sethi
Mingzheng Wang
Hanqin Zhang

Detail(s)

Original language	English
Article number	5752820
Pages (from-to)	2869-2882
Journal / Publication	IEEE Transactions on Automatic Control
Volume	56
Issue number	12
Publication status	Published - Dec 2011
Externally published	Yes

Link(s)

DOI	DOI https://doi.org/10.1109/TAC.2011.2144650 Final Published version
	Check@CityULib
Link to Scopus	https://www.scopus.com/record/display.uri?eid=2-s2.0-83255184621&origin=recordpage
Permanent Link	https://scholars.cityu.edu.hk/en/publications/publication(0f9bf047-9341-4fba-b966-5360bc503f36).html

Abstract

Information delays exist when the most recent inventory information available to the Inventory Manager (IM) is dated. In other words, the IM observes only the inventory level that belongs to an earlier period. Such situations are not uncommon, and they arise when it takes a while to process the demand data and pass the results to the IM. In this paper, we establish that the average cost optimal policy is of state-dependent basestock type with respect to the reference inventory position. We show that the optimal base stock depends on the age and the magnitude of the latest observed delay. We illustrate the results by solving an example with delays of 0 and 1, for which we are able to obtain formulas/bounds for the basestock levels. © 2006 IEEE.

Research Area(s)

Average cost optimality, Base stock policies, Dynamic information delays, Partial observations, Stochastic inventory

Citation Format(s)

[ RIS ] [ BibTeX ]

Average cost optimality in inventory models with dynamic information delays. / Bensoussan, Alain; Cakanyildirim, Metin; Sethi, Suresh P. et al.
In: IEEE Transactions on Automatic Control, Vol. 56, No. 12, 5752820, 12.2011, p. 2869-2882.

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

Bensoussan, A, Cakanyildirim, M, Sethi, SP, Wang, M & Zhang, H 2011, 'Average cost optimality in inventory models with dynamic information delays', IEEE Transactions on Automatic Control, vol. 56, no. 12, 5752820, pp. 2869-2882. https://doi.org/10.1109/TAC.2011.2144650

Bensoussan, A., Cakanyildirim, M., Sethi, S. P., Wang, M., & Zhang, H. (2011). Average cost optimality in inventory models with dynamic information delays. IEEE Transactions on Automatic Control, 56(12), 2869-2882. Article 5752820. https://doi.org/10.1109/TAC.2011.2144650

Bensoussan A, Cakanyildirim M, Sethi SP, Wang M, Zhang H. Average cost optimality in inventory models with dynamic information delays. IEEE Transactions on Automatic Control. 2011 Dec;56(12):2869-2882. 5752820. doi: 10.1109/TAC.2011.2144650

Bensoussan, Alain ; Cakanyildirim, Metin ; Sethi, Suresh P. et al. / Average cost optimality in inventory models with dynamic information delays. In: IEEE Transactions on Automatic Control. 2011 ; Vol. 56, No. 12. pp. 2869-2882.