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April  2011, 7(2): 425-434. doi: 10.3934/jimo.2011.7.425

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, China, China, China

Received  October 2010 Revised  January 2011 Published  April 2011

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.
Citation: Jia Shu, Zhengyi Li, Weijun Zhong. A market selection and inventory ordering problem under demand uncertainty. Journal of Industrial & Management Optimization, 2011, 7 (2) : 425-434. doi: 10.3934/jimo.2011.7.425
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