Supported by the Luxembourg National Research Fund (FNR) 17539924
Abstract
In this talk, I will present my recent studies on a fundamental class of periodic-review inventory systems for perishable products with a fixed product lifetime. The system settings we consider are very general: the inventory replenishment lead times can be either zero or positive, the demands are satisfied by on-hand inventories of different ages according to a general issuance policy (e.g., first-in-first-out (FIFO) or last-in-first-out (LIFO)), and unsatisfied demands can be either backlogged or lost. The objective is to minimise the long-run average holding, penalty, and outdating costs. The optimal inventory policy for this class of inventory systems is known to be very complex and intractable in computation because of the curse of dimensionality. For the systems with zero lead times, we show that the class of base-stock policies is asymptotically optimal with large unit penalty costs under the FIFO issuance policy and under a general issuance policy in case of bounded demands. For the systems with positive lead times, we show that the class of projected inventory level policies is asymptotically optimal with large unit penalty costs for a large class of demand distributions. Several other asymptotic-optimality results are also shown for both classes of policies. Our numerical results demonstrate the performances of both policies in these systems.
About Xiting Gong
Register for the seminar – as of June 5, 2023