Good and bad news about the (S, T) policy

This paper studies the optimization of the (S, T) inventory policy, where T is the replenishment interval and S is the order-up-to level. First, we demonstrate that the previously established joint convexity of the long-run average cost is false. Hence, the optimization is not straightforward. We th...

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Main Authors: Liu, Fang, Song, Jing-Sheng
Other Authors: Nanyang Business School
Format: Article
Language:English
Published: 2013
Subjects:
Online Access:https://hdl.handle.net/10356/100791
http://hdl.handle.net/10220/18242
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-1007912023-05-19T06:44:41Z Good and bad news about the (S, T) policy Liu, Fang Song, Jing-Sheng Nanyang Business School Business This paper studies the optimization of the (S, T) inventory policy, where T is the replenishment interval and S is the order-up-to level. First, we demonstrate that the previously established joint convexity of the long-run average cost is false. Hence, the optimization is not straightforward. We then point out that the joint convexity concept depends on whether S and T are continuous or discrete variables, and in some situations it may not even be well defined. Nonetheless, we are able to identify several useful properties of the cost function, such as submodularity and coordinatewise convexity. Based on these properties, we develop efficient algorithms to compute the optimal policy for continuous and discrete demands. 2013-12-16T03:06:29Z 2019-12-06T20:28:19Z 2013-12-16T03:06:29Z 2019-12-06T20:28:19Z 2012 2012 Journal Article Liu, F., & Song, J.-S. (2012). Good and bad news about the (S, T) policy. Manufacturing & service operations management, 14(1), 42-49. 1523-4614 https://hdl.handle.net/10356/100791 http://hdl.handle.net/10220/18242 10.1287/msom.1110.0353 en Manufacturing & service operations management © 2012 INFORMS.
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic Business
spellingShingle Business
Liu, Fang
Song, Jing-Sheng
Good and bad news about the (S, T) policy
description This paper studies the optimization of the (S, T) inventory policy, where T is the replenishment interval and S is the order-up-to level. First, we demonstrate that the previously established joint convexity of the long-run average cost is false. Hence, the optimization is not straightforward. We then point out that the joint convexity concept depends on whether S and T are continuous or discrete variables, and in some situations it may not even be well defined. Nonetheless, we are able to identify several useful properties of the cost function, such as submodularity and coordinatewise convexity. Based on these properties, we develop efficient algorithms to compute the optimal policy for continuous and discrete demands.
author2 Nanyang Business School
author_facet Nanyang Business School
Liu, Fang
Song, Jing-Sheng
format Article
author Liu, Fang
Song, Jing-Sheng
author_sort Liu, Fang
title Good and bad news about the (S, T) policy
title_short Good and bad news about the (S, T) policy
title_full Good and bad news about the (S, T) policy
title_fullStr Good and bad news about the (S, T) policy
title_full_unstemmed Good and bad news about the (S, T) policy
title_sort good and bad news about the (s, t) policy
publishDate 2013
url https://hdl.handle.net/10356/100791
http://hdl.handle.net/10220/18242
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