The production/ordering cost structure is fundamental to determining an optimal inventory control policy. For example, it is well known that a base‐stock policy is optimal for inventory systems with linear production costs, whereas an (s, S) policy is optimal if both linear and fixed costs exist. However, many of the cost structures that have arisen from the practice are quite complex and make the optimal policies too complicated for managers to implement. In this study, we propose several easy‐to‐implement and efficient heuristic policies for inventory systems with general production costs, which include multiple linear pieces and fixed costs, suggesting a wide application to many practical problems that were previously difficult to solve. We establish the worst‐case performance bounds on the proposed heuristic policies by using the concept of K‐approximate convexity. Our extensive numerical studies, which are designed to reflect practical inventory control applications, evaluate the performance of the heuristic policies and show that the best heuristic policy we propose performs extremely well. We also try to provide explanations for the performance of different heuristic policies.
Production and Operations Management – Wiley
Published: Jan 1, 2018
Keywords: ; ;
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera