Abstract
In this paper, we establish two preservation results of additive convexity for a class of optimal transformation problems and a class of optimal disposal problems. For both classes of problems, there are multiple resources; our results show that if these resources have different priorities to be transformed/disposed under the optimal policy, then the additive convexity and bounded monotonicity of the objective function are preserved to the value function after optimization. A key observation is that an optimal transformation problem with prioritized optimal decisions is equivalent to a serial inventory problem with zero lead times. We demonstrate the applications of our results to several stochastic optimization problems in operations management. © 2021 INFORMS.
| Original language | English |
|---|---|
| Pages (from-to) | 1015-1024 |
| Number of pages | 10 |
| Journal | Operations Research |
| Volume | 69 |
| Issue number | 4 |
| Online published | 5 Mar 2021 |
| DOIs | |
| Publication status | Published - Jul 2021 |
| Externally published | Yes |
Funding
X. Gong was partially supported by the Hong Kong Research Grants Council General Research Fund [Grant CUHK14200718]. T. Wang was partially supported by the National Natural Science Foundation of China [Grants NSFC-71801152 and NSFC-71931007] and the Shanghai Pujiang Program [Grant 18PJC079]. The authors thank Area Editor Chung Piaw Teo, the anonymous associate editor, and three anonymous referees for their constructive comments and suggestions, which helped the authors to improve both the content and exposition of the paper.
Research Keywords
- Additive convexity
- Capacity management
- Disposal
- Dynamic programming
- Inventory rationing expediting
- Remanufacturing systems
- Serial inventory systems
