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Stochastic Inventory Models

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Operations, Logistics and Supply Chain Management

Part of the book series: Lecture Notes in Logistics ((LNLO))

Abstract

We discuss inventory systems in an independent demand setting, where demand over time is modeled as a stationary stochastic process. We begin with some basic notions and definitions on inventory management, followed by a discussion of well-known (and applied) control systems. Under periodic review and a linear cost structure, it is known that the optimal control policy has a critical level structure, hence we analyze such critical level policies in detail. After that, in an advanced section, we turn to multi-echelon or multi-stage systems. We present a complete analysis of the decomposition result proven initially by Clark and Scarf, and its analogue in distribution systems, i.e., systems with an arborescent instead of a linear structure (state-of-the-art). Computational aspects are briefly discussed after which we close with some guidelines for further reading.

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Authors and Affiliations

  1. Department of Industrial Engineering and Business Information Systems, University of Twente, Enschede, Overijssel, The Netherlands

    Henk Zijm

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  1. Henk Zijm
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Correspondence to Henk Zijm .

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Editors and Affiliations

  1. Department of Industrial Engineering and Business Information Systems, University of Twente, Enschede, Overijssel, The Netherlands

    Henk Zijm

  2. FOM University of Applied Sciences, Essen, Nordrhein-Westfalen, Germany

    Matthias Klumpp

  3. Department of Industrial Engineering, University of Bologna, Bologna, Italy

    Alberto Regattieri

  4. Industrial Engineering and Management, Oklahoma State University, Stillwater, OK, USA

    Sunderesh Heragu

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Zijm, H. (2019). Stochastic Inventory Models. In: Zijm, H., Klumpp, M., Regattieri, A., Heragu, S. (eds) Operations, Logistics and Supply Chain Management. Lecture Notes in Logistics. Springer, Cham. https://doi.org/10.1007/978-3-319-92447-2_20

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  • DOI: https://doi.org/10.1007/978-3-319-92447-2_20

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-92446-5

  • Online ISBN: 978-3-319-92447-2

  • eBook Packages: EngineeringEngineering (R0)

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