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We consider an inventory system in which inventory level fluctuates as a Brownian motion in the absence of control. The inventory continuously accumulates cost at a rate that is a general convex function of the inventory level, which can be negative when there is a backlog. At any time, the inventory level can be adjusted by a positive or negative amount, which incurs a fixed cost and a proport...

We develop the first approximation algorithm for periodic-review perishable inventory systems with setup costs. The ordering lead time is zero. The model allows for correlated demand processes which generalize the well-known approaches to model dynamic demand forecast updates. The structure of optimal policies for this fundamental class of problems is not known in the literature. Thus, finding ...

We develop the first approximation algorithm with worst-case performance guarantee for capacitated stochastic periodic-review inventory systems with setup costs. The structure of the optimal control policy for such systems is extremely complicated, and indeed, only some partial characterization is available. Thus, finding provably near-optimal control policies has been an open challenge. In thi...

today according to the competitive conditions, companies try to reduce their inventory level to diminish the costs. in companies inventory management and control should establish a balance between inventory level of spare parts, cost and the risk that arising from absence of part when is needed. it is clear that this level of spare parts inventory affected by facility characteristics and its re...

In this paper we characterize the structure of optimal policies for periodic review inventory systems with concave ordering costs. By extending the Scarf (1958) model to systems with piecewise linear concave ordering costs, we show the optimality of generalized (s, S) policies for general demand distributions. We do so by (a) introducing a conditional monotonicity property for the order-up-to l...

We propose and analyze a general periodic-review model in which the firm has access to a set of potential suppliers, each with specific yield and price characteristics. Assuming that unsatisfied demand is backlogged, the firm incurs three types of costs: (i) procurement costs, (ii) inventory-carrying costs for units carried over from one period to the next, and (iii) backlogging costs. A procur...

I examine the behavior of inventories and their role in the short-run dynamics of commodity production and price. Competitive producers of a storable commodity react to price changes by balancing costs of changing production with costs of changing inventory holdings. To determine these costs, I estimate a structural model of production, sales, and storage for copper, heating oil, and lumber. I ...

The supply chain between manufacturers and retailers always includes transshipments through a network of locations. A major challenge in making demand meet supply has been to coordinate transshipment activities across the chain aimed at reducing costs and increasing service levels in the face of a range of factors, including demand fluctuations, short lead times, warehouse limitations and trans...