We consider a stochastic multi-product inventory model with a ware-housing constraint with the objective of minimizing the expected long-run average cost. Using the vanishing discount approach, a dynamic programming equation and the corresponding verification result are established. The...

A critical assumption in the vast literature on inventory management has been that the current level of inventory is known to the decision maker. Some of the most celebrated results such as the optimality of base-stock policies have been obtained under this assumption. Yet it is often the case...

This paper is concerned with finding an optimal inventory policy for a finite horizon, two-stage inventory model. In this model, products may be manufactured in two stages. The first stage uses raw material from an external supplier and the second stage uses raw material from defective items...

We propose a model where customers are classified into two groups: short lead-time customers who require the product immediately and long lead-time customers to whom the supplier may deliver either immediately or in the next cycle. Unmet orders are backlogged with associated costs. Specifically,...

We study a firm's optimal transshipment problem considering the impacts of setup costs for transshipment and demand distribution shapes. We assume that the demand follows a three-point distribution, which changes from a degenerate distribution, to a unimodal distribution, and to a bimodal...

This paper investigates a decentralized assembly system that consists of one manufacturer and multiple suppliers who produce the complementary components. In a single selling season, the manufacturer initially sets a vendor inventory liability period (VILP) to control the suppliers' delivery...

We analyze a price-setting news-vendor problem with an additive – multiplicative demand. We show that the uni-modality of the news-vendor profit function holds when the underlying random term has an increasing failure rate and the demand functions satisfy certain concavity conditions....

We analyze a finite horizon periodic-review inventory model in the presence of advance purchase dis- count (APD). In addition to the opportunity to place a contingent order when required, the buyer can also commit to advance orders and receive discounts. Thus the buyer faces the following...

We investigate how a supply chain involving a risk-neutral supplier and a downside-risk-averse retailer can be coordinated with a supply contract. We show that the standard buy-back or revenue-sharing contracts may not coordinate such a channel. Using a definition of coordination of supply...

In many inventory control contexts, inventory levels are only partially (i.e., not fully) observed. This may be due to non-observation of demand, spoilage, misplacement, or theft of inventory. We study a periodic review inventory system where the unmet demand is backordered. When inventory level...