A cash constrained single item stochastic lot-sizing problem

Zhen Chen; Roberto Rossi

doi:10.1016/j.ifacol.2019.11.408

A cash constrained single item stochastic lot-sizing problem

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Abstract

We investigate a dynamic inventory management problem where a cash-constrained small retailer periodically purchases an item from a supplier and sells it to the customers with non-stationary demands. At each period, the retailer's available cash restricts the maximum inventory level that it can replenish. There exists a fixed ordering cost for the retailer when ordering and this results in a stochastic lot-sizing problem. We build a stochastic dynamic programming model for this problem and find some characteristics of the optimal ordering pattern.

Original language	English
Title of host publication	Proceedings of the 9th IFAC INFORMS Conference
Subtitle of host publication	Manufacturing Modelling, Management and Control - MIM 2019
Pages	1479-1483
DOIs	https://doi.org/10.1016/j.ifacol.2019.11.408
Publication status	E-pub ahead of print - 25 Dec 2019

Publication series

Name	IFAC-PapersOnLine
Publisher	Elsevier
Number	13
Volume	52
ISSN (Print)	2405-8963

Keywords / Materials (for Non-textual outputs)

inventory control
stochastic lot sizing
non stationary demand
cash constraint

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10.1016/j.ifacol.2019.11.408

ChenEtal2019IFACACashConstrainedSingleItemStochasticLotAccepted author manuscript, 283 KBLicence: Creative Commons: Attribution-NonCommercial-NoDerivatives (CC BY-NC-ND)

Cite this

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AB - We investigate a dynamic inventory management problem where a cash-constrained small retailer periodically purchases an item from a supplier and sells it to the customers with non-stationary demands. At each period, the retailer's available cash restricts the maximum inventory level that it can replenish. There exists a fixed ordering cost for the retailer when ordering and this results in a stochastic lot-sizing problem. We build a stochastic dynamic programming model for this problem and find some characteristics of the optimal ordering pattern.

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KW - non stationary demand

KW - cash constraint

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A cash constrained single item stochastic lot-sizing problem

Abstract

Publication series

Keywords / Materials (for Non-textual outputs)

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A dynamic ordering policy for a stochastic inventory problem with cash constraints

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