2020/06/12 by Katsunobu Sasanuma, Mohammad Delasay, Sasanuma, Katsunobu +7
Business, Management and Accounting · Decision Sciences · #Auction Theory and Applications #FOS: Mathematics #Optimization and Control (math.OC) #Supply Chain and Inventory Management
paper · pdf · doi:10.48550/arxiv.2006.06912
openalex publication_date 2020/06/12 · openalex created_date 2022/10/04 · openalex updated_date 2026/07/28
Finding the optimal policy for multi-period perishable inventory systems requires solving computationally-expensive stochastic dynamic programs (DP). To avoid the difficulty of solving DP models, we propose a framework that uses an externality term to capture the long-term impact of ordering decisions on the average cost over an infinite horizon. By approximating the externality term, we yield a tractable approximate optimality condition, which is solved through standard marginal analysis. The resulted policy is near-optimal in long-run average cost and ordering decisions.