Inventory control over a short time horizon under unknown demand distribution

Konstantin Kogan; Avi Herbon

doi:10.1109/tac.2015.2496952

Inventory control over a short time horizon under unknown demand distribution

Konstantin Kogan, Avi Herbon

Department of Management

Bar-Ilan University

Research output: Contribution to journal › Article › peer-review

Abstract

We address inventory control by a manufacturer under stochastic customer demand over a finite time horizon when little is known about the demand. To handle the problem, we replace it with a deterministic differential game in which the manufacturer competes with the customer's demand. On the basis of the conjectural variation equilibrium of this game, we derive a heuristic for the original stochastic problem; conjectural variation is used as a tuning parameter for the heuristic.

Original language	English
Article number	7315028
Pages (from-to)	3058-3063
Number of pages	6
Journal	IEEE Transactions on Automatic Control
Volume	61
Issue number	10
DOIs	https://doi.org/10.1109/tac.2015.2496952
State	Published - 2016

Keywords

Conjectural variation
Differential games
Inventory control
Stochastic demands

All Science Journal Classification (ASJC) codes

Control and Systems Engineering
Computer Science Applications
Electrical and Electronic Engineering

Access to Document

10.1109/tac.2015.2496952

Cite this

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AB - We address inventory control by a manufacturer under stochastic customer demand over a finite time horizon when little is known about the demand. To handle the problem, we replace it with a deterministic differential game in which the manufacturer competes with the customer's demand. On the basis of the conjectural variation equilibrium of this game, we derive a heuristic for the original stochastic problem; conjectural variation is used as a tuning parameter for the heuristic.

KW - Conjectural variation

KW - Differential games

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KW - Stochastic demands

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Inventory control over a short time horizon under unknown demand distribution

Abstract

Keywords

All Science Journal Classification (ASJC) codes

Access to Document

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Cite this