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Stochastic Multiproduct Inventory Models with Limited Storage

Author

Listed:
  • D. Beyer

    (Hewlett-Packard Laboratories)

  • S. P. Sethi

    (University of Texas at Dallas)

  • R. Sridhar

    (i2 Technologies)

Abstract

This paper studies multiproduct inventory models with stochastic demands and a warehousing constraint. Finite horizon as well as stationary and nonstationary discounted-cost infinite-horizon problems are addressed. Existence of optimal feedback policies is established under fairly general assumptions. Furthermore, the structure of the optimal policies is analyzed when the ordering cost is linear and the inventory/backlog cost is convex. The optimal policies generalize the base-stock policies in the single-product case. Finally, in the stationary infinite-horizon case, a myopic policy is proved to be optimal if the product demands are independent and the cost functions are separable.

Suggested Citation

  • D. Beyer & S. P. Sethi & R. Sridhar, 2001. "Stochastic Multiproduct Inventory Models with Limited Storage," Journal of Optimization Theory and Applications, Springer, vol. 111(3), pages 553-588, December.
    • Handle: RePEc:spr:joptap:v:111:y:2001:i:3:d:10.1023_a:1012649927844
    DOI: 10.1023/A:1012649927844
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    References listed on IDEAS

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    Cited by:

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    2. Cong Shi & Weidong Chen & Izak Duenyas, 2016. "Technical Note—Nonparametric Data-Driven Algorithms for Multiproduct Inventory Systems with Censored Demand," Operations Research, INFORMS, vol. 64(2), pages 362-370, April.
    3. Hariga, Moncer A., 2010. "A single-item continuous review inventory problem with space restriction," International Journal of Production Economics, Elsevier, vol. 128(1), pages 153-158, November.
    4. Minner, Stefan & Silver, Edward A., 2007. "Replenishment policies for multiple products with compound-Poisson demand that share a common warehouse," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 388-398, July.

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