We consider a finite-horizon single-product periodic-review inventory managementproblem with demand distribution uncertainty. We formulate the problemas a dynamic program and prove the existence of an optimal (s, S) policy. Thecorresponding dynamic robust counterpart models are then developed for thebox and the ellipsoid uncertainty sets. These counterpart models are transformedinto tractable linear and second-order cone programs, respectively. Weillustrate the effectiveness and practicality of the proposed robust optimizationapproaches through a numerical study.
inventory, periodic-review (s, S) policy, robust optimization, demand distribution uncertainty, dynamic programming
Operations and Supply Chain Management
European Journal of Operational Research
QIU, Ruozhen; SUN, Minghe; and LIM, Yun Fong.
Optimizing (s, S) policies for multi-period inventory models with demand distribution uncertainty: Robust dynamic programming approaches. (2017). European Journal of Operational Research. 261, (3), 880-892. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5110
Copyright Owner and License
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.