In this paper we address the long-standing problem of finding computationally efficient and provably good inventory control policies in supply chains with correlated and nonstationary (time-dependent) stochastic demands. This problem arises in many domains and has many practical applications such as dynamic forecast updates (for some applications see Erkip et al. 1990 and Lee et al. 1999). We c...

We consider a single-item, periodic review inventory control problem where discrete stochastic demand must be satisfied. When shortages occur, the unmet demand must be filled by some form of expediting. We allow a very general form for the cost structure of expediting, including the special case of lost sales. Examples of expediting are overtime production, where production is allowed above and...

This dissertation extends the classical inventory control model to address stochastic inventory control problems raised in market-making and robust supply chains. In the financial market, market-makers assume the role of a counterpart so tbat investors can trade any fixed amounts of assets at quoted bid or ask prices at any time. Market-makers )ellefit from the spread between the bid and ask pr...

An inventory manager is typically concerned with a number of diierent products. His decision-making task is made complicated by such factors as interdependent uncertain product demands and competition for limited storage space. The stochastic inventory problem involving these complexities cannot in general be decomposed into a number of distinct single product problems. In the paper \Stochastic...

The need for integration in supply chain management leads us to consider the coordination of two logistic planning functions: transportation and inventory. The coordination of these activities can be an extremely important source of competitive advantage in supply chain management. The battle for cost reduction can involve finding the equilibrium between transportation and inventory management ...

The efficient management of a distribution system requires coordination between transportation planning and inventory control. Small and frequent shipments can reduce inventory levels while maintaining high customer service levels, but they increase unit transportation costs due to inappropriate utilization of the vehicles and more handling costs. On the other hand shipment consolidation polici...

We consider stochastic nite-horizon inventory models with discrete distributions that are incompletely speciied by selected moments, percentiles, or a combination of moments and per-centiles. The objective is to determine an inventory policy that minimizes the maximum expected cost over the class of demand distributions satisfying the speciications described above. We show that many inventory m...

In this article we propose, for any > 0, a 2(1+ )-approximation algorithm for a facility location problem with stochastic demands. At open facilities, inventory is kept such that arriving requests find a zero inventory with (at most) some pre-specified probability. The incurred costs are the expected transportation costs from the demand points to the facilities, the operating costs of the facil...

This paper considers a stochastic dynamic inventory problem involving a single item, linear cost structures, and finite distributions (but not necessarily independent) for the stochastic cost and demand parameters. We develop primal and dual algorithms for a multi-stage stochastic linear programming formulation for the problem. The complexity of the proposed algorithms is shown to be within O(N...