Communications - Scientific Letters of the University of Zilina 2000, 2(4):16-28 | DOI: 10.26552/com.C.2000.4.16-28
Cost-Effective Inventory Control Under Risk
- 1 Department of Special Technologies, Faculty of Management Science and Informatics, University of ®ilina, Slovak Republic
Inventory systems play an important role in manufacturing and service providing organisations to support fluency of production or service. Evolution in time and environment of risk usually characterise operation of such systems. Proper control rules are required for decision making on replenishment orders. If stochastic dynamics of system motion exhibits the Markovian property, then Markov decision models can be employed to reveal a cost-effective inventory control policy. A single-item periodic-review inventory system in the maintenance centre of amanufacturing or transportation organisation with aPoisson arrival stream of demand requirements for spare components is introduced in the paper. The corresponding discrete-time Markov decision model with finite state and action spaces is described for sequential decisions on order sizes over an infinite planning horizon. The long-run expected average cost per unit time is the criterion of interest to be minimised by an optimal inventory control policy.
Keywords: Markov decision processes, inventory control, periodicreview inventory systems
Published: December 31, 2000 Show citation
References
- TIJMS, H. C.: Stochastic Modelling and Analysis: A Computational Approach. Wiley, Chichester, 1986
- PUTERMAN, M. L.: Markov Decision Processes: Discrete Stochastic Dynamic Programming. Wiley, New York, 1994
Go to original source... - BARTL, O.: Inventory control Markov decision models. In: Second Scientific Conference "Effective Transport, the Way to European Union" - Section 1 & 2. University of Pardubice, Pardubice, 1999, pp. 371-376
This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.