T life cycle of new products is becoming shorter and shorter in all markets. For electronic products, life cycles are measured in units of months, with 6to 12-month life cycles being common. Given these short product life cycles, product demand is increasingly difficult to forecast. Furthermore, demand is never really stationary because the demand rate evolves over the life of the product. In t...

In this paper, we consider numerous inventory control problems for which the base-stock policies are known to be optimal and we propose stochastic approximation methods to compute the optimal base-stock levels. The existing stochastic approximation methods in the literature guarantee that their iterates converge, but not necessarily to the optimal base-stock levels. In contrast, we prove that t...

This paper considers a single-item, periodic-review inventory model with uncertain demands. We assume a finite production capacity in each period. With stationary data, a convex one-period cost function and a continuous demand distribution, we show (under a few additional unrestrictive assumptions) that a modified basic-stock policy is optimal under the discounted cost criterion, both for finit...

We consider dynamic pricing and replenishment decisions for a production/inventory system modeled by a make-to-stock queue. The potential customer demand is generated by a MarkovModulated (environment-dependent) Poisson process and the actual demand depends on the price offered at the time of the transaction. Using a Markov Decision Process framework, we obtain results on the structure of the o...

In this paper, we consider a serial two-echelon periodic review inventory system with two supply modes at the most upstream stock point. As control policy for this system, we propose a natural extension of the dual-index policy, which has three base-stock levels. We consider the minimization of long run average inventory holding, backlogging, and both per unit and fixed emergency ordering costs...

The bullwhip effect is a well-known phenomenon of demand information distortion in supply chains. To measure the bullwhip effect in a supply chain, researchers often resort to material flow data, i.e., shipments and sales data, as proxies for order and demand information. In this paper, we study the accuracy of such an approximated bullwhip measure and provide remedies for correcting the estima...

Demand information can easily be shared in advance with the use of the latest technologies in the supply chain. Advance demand information can be used to compensate demand uncertainty and decrease inventory costs. In order to benefit from advance demand information, it should be effectively integrated into the system. In this paper, we examine a production-inventory system with multiple classes...

In this paper, we develop approximations that yield insight into the joint optimization of capacity and inventory, and how the optimal inventory policy varies with capacity investment in a single-product, single-station, make-to-stock manufacturing system in which inventory is managed through a base-stock policy. We allow for a correlated demand stream as we analyze our models in an asymptotic ...

We consider a finite-horizon, periodic-review inventory model with demand forecasting updates following the martingale model of forecast evolution (MMFE). The optimal policy is a state-dependent base-stock policy, which, however, is computationally intractable to obtain. We develop tractable bounds on the optimal base-stock levels and use them to devise a general class of heuristic solutions. T...