A market selection and inventory ordering problem under demand uncertainty

Jia Shu; Zhengyi Li; Weijun Zhong

doi:10.3934/jimo.2011.7.425

Article Contents

2011, Volume 7, Issue 2: 425-434. Doi: 10.3934/jimo.2011.7.425

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A market selection and inventory ordering problem under demand uncertainty

1.
Department of Management Science and Engineering, School of Economics and Management, Southeast University, Nanjing 211189

Received: October 2010

Revised: January 2011

Published: April 2011

Abstract / Introduction Related Papers Cited by

Abstract

We study an integrated market selection and inventory control problem that was initially proposed by Geunes et al. [Naval Research Logistics, 51(1):117-136, 2004]. This problem generalizes the classical EOQ problem by incorporating the market choice decisions. In this note, we further consider the problem with stochastic demand in which we assume the demand mean and variance are known for each market. We show that the problem can be formulated as an unconstrained nonlinear binary IP model. Its special structure leads to efficient solution algorithms and we summarize some interesting observations via numerical experiments.

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Mathematics Subject Classification: Primary: 90B80, 90C10.

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