Optimal policy for inventory systems with capacity commitment and fixed ordering costs

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

View graph of relations

Author(s)

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)9-17
Journal / PublicationOperations Research Letters
Volume48
Issue number1
Online published23 Oct 2019
Publication statusPublished - Jan 2020

Abstract

This paper investigates a single-product, periodic-review, non-stationary inventory system with total maximum capacity commitment and fixed ordering costs over a finite planning horizon. We characterize the optimal ordering policy as a state-dependent (s, S) policy whose parameters only depend on the sum of the net inventory and the remaining capacity. We show that such policy can degenerate into two simple policies in two special cases respectively. We also derive bounds on parameters of the optimal ordering policy.

Research Area(s)

  • (s, S) policy, Capacity commitment, Inventory/production model, K-convexity

Citation Format(s)

Optimal policy for inventory systems with capacity commitment and fixed ordering costs. / Kong, Xiangyin; Wang, Huihui; Chen, Xi; Feng, Gengzhong.

In: Operations Research Letters, Vol. 48, No. 1, 01.2020, p. 9-17.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review