An intuitive approach to inventory control with optimal stopping

Nicky D. Van Foreest*, Onur A. Kilic

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

53 Downloads (Pure)

Samenvatting

In this research note, we show that a simple application of Breiman's work on optimal stopping in 1964 leads to an elementary proof that (s,S) policies minimize the long-run average cost for periodic-review inventory control problems. The method of proof is appealing as it only depends on the fundamental concepts of renewal-reward processes, optimal stopping, dynamic programming, and root-finding. Moreover, it leads to an efficient algorithm to compute the optimal policy parameters. If Breiman's paper would have received the attention it deserved, computational methods dealing with (s,S)-policies would have been found about three decades earlier than the famous algorithm of Zheng and Federgruen (1991).

Originele taal-2English
Pagina's (van-tot)921-924
Aantal pagina's4
TijdschriftEuropean Journal of Operational Research
Volume311
Nummer van het tijdschrift3
DOI's
StatusPublished - 16-dec.-2023

Vingerafdruk

Duik in de onderzoeksthema's van 'An intuitive approach to inventory control with optimal stopping'. Samen vormen ze een unieke vingerafdruk.

Citeer dit