Market-makers serve an important role as providers of liquidity and order in financial markets, particularly during periods of high volatility. Optimal market-makers solve a sequential decision making problem, where they face an exploration versus exploitation dilemma at each time step. A belief state MDP based solution was presented by Das and Magdon-Ismail [2008]. This solution however, was c...

In many practical situations the coordination of transportation management and inventory management may lead to considerable cost reductions. Transportation management includes the application of different types of shipment consolidation policies. Shipment consolidation takes into account the logistics strategy of combining two or more shipment orders to optimize transportation. When the shipme...

The unanticipated shortening of a product’s life cycle can have a dramatic effect on inventory costs. Where the cause is physical decay or an unexpected decline in demand, producers can quickly find themselves quickly holding inventory that has degraded value or no value at all. In this research, we propose that an inventory system with this characteristic can be modeled as a Markov Process wit...

We analyze a dual-source, production-inventory model in which the processing times at a primary manufacturing resource and a second, contingent resource are exponentially distributed. We interpret the contingent source to be a subcontractor, although it could also be overtime production. We treat the inventory and contingent sourcing policies as decision variables in an analytical study and, ad...

Optimizing multi-product assemble-to-order (ATO) inventory systems is a long-standing difficult problem. We consider ATO systems with identical component lead times and a general ‘bill of materials’. We use a related two-stage stochastic program (SP) to set a lower bound on the average inventory cost and develop inventory control policies for the dynamic ATO system using this SP. We apply the f...

We study adaptive policies that handle dynamic inventory and price controls while the random demand for discrete nonperishable items is unknown. Pure inventory control is achieved by targeting newsvendor ordering quantities that correspond to empirical demand distributions learned over time. On the basis of it we conduct the more complex joint inventory-price control, whereupon demand-affecting...

We study a periodic-review production/inventory control problem where both the supply of raw material and demand for the finished product are exogenous and random, the raw material can be stored for future use, can be purchased from or sold to an outside market. We study both the lost sales and backlogging cases under both strict convex and linear raw material purchasing/selling costs. Convexit...

In this article, we consider a classic dynamic inventory control problem of a self-financing retailer who periodically replenishes its stock from a supplier and sells it to the market. The replenishment decisions of the retailer are constrained by cash flow, which is updated periodically following purchasing and sales in each period. Excess demand in each period is lost when insufficient invent...

This paper deals with the problem of determining the optimal retailer’s replenishment decisions for deteriorating items under two levels of trade credit policy within the economic order quantity (EOQ) framework to reflect the supply chain management situation. We investigate the retailer's inventory system as a cost minimization problem to determine the retailer's optimal inventory policy under...

There is a growing consensus that a portfolio of customers with different demand lead times can lead to higher, more regular revenues and better capacity utilization. Customers with positive demand lead times place orders in advance of their needs, resulting in advance demand information. This gives rise to the problem of finding effective inventory control policies under advance demand informa...