Optimal inventory decisions in a multiperiod newsvendor problem with partially observed Markovian supply capacities
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Detail(s)
Original language | English |
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Pages (from-to) | 502-517 |
Journal / Publication | European Journal of Operational Research |
Volume | 202 |
Issue number | 2 |
Publication status | Published - 16 Apr 2010 |
Externally published | Yes |
Link(s)
Abstract
This paper considers a multi-period news-vendor problem with partially observed supply-capacity information which evolves as a Markovian Process. The supply capacity is fully observed by the buyer when the capacity is smaller than the buyer's ordering quantity. Otherwise, the buyer knows that the current-period supply capacity is greater than its ordering quantity. Based on these two observations, the buyer updates the future supply-capacity forecasting accordingly. With a dynamic programming formulation, we prove the existence of an optimal ordering policy. We also prove that the optimal order quantity is greater than the myopic order quantity. © 2009 Elsevier B.V. All rights reserved.
Research Area(s)
- Capacity learning, Inventory planning and control, Markovian process, Partial information
Citation Format(s)
Optimal inventory decisions in a multiperiod newsvendor problem with partially observed Markovian supply capacities. / Wang, Haifeng; Chen, Bocheng; Yan, Houmin.
In: European Journal of Operational Research, Vol. 202, No. 2, 16.04.2010, p. 502-517.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review