Asymptotic Optimality of Constant-Order Policies for Lost Sales Inventory Models with Large Lead Times

Asymptotic Optimality of Tailored Base-Surge Policies in Dual-Sourcing Inventory Systems

Dual-sourcing inventory systems, in which one supplier is faster (i.e. express) and more costly, while the other is slower (i.e. regular) and cheaper, arise naturally in many real-world supply chains. These systems are notoriously difficult to optimize due to the complex structure of the optimal solution and the curse of dimensionality, having resisted solution for over 40 years. Recently, so-c...

Optimality Gap of Constant-Order Policies Decays Exponentially in the Lead Time for Lost Sales Models

Inventory models with lost sales and large lead times have traditionally been considered intractable, due to the curse of dimensionality which arises from having to track the set of orders placed but not yet received (i.e. pipeline vector). Recently, Goldberg et al. (2012) laid the foundations for a new approach to solving these models, by proving that as the lead time grows large (with the oth...

A 2-Approximation Algorithm for Stochastic Inventory Control Models with Lost Sales

In this paper, we describe the first computationally efficient policies for stochastic inventory models with lost sales and replenishment lead times that admit worst-case performance guarantees. In particular, we introduce dual-balancing policies for lost-sales models that are conceptually similar to dual-balancing policies recently introduced for a broad class of inventory models in which dema...

Electronic Companion — “ Asymptotic Optimality of Order - Up - To Policies in Lost Sales Inventory Systems ” by Woonghee

One-for-One Period Policy and its Optimal Solution

In this paper we introduce the optimal solution for a simple and yet practical inventory policy with the important characteristic which eliminates the uncertainty in demand for suppliers. In this new policy which is different from the classical inventory policies, the time interval between any two consecutive orders is fixed and the quantity of each order is one. Assuming the fixed ordering cos...