A practical inventory control policy using operational statistics

Liwan H. Liyanage; J. George Shanthikumar

doi:10.1016/j.orl.2004.08.003

A practical inventory control policy using operational statistics

Liwan H. Liyanage
, J. George Shanthikumar

Research output: Contribution to journal › Article › peer-review

137 Citations (Scopus)

Abstract

Consider the newsvendor inventory control problem with an ambiguous demand. The traditional approach of separating the parameter estimation and the maximization of the expected profit leads to a suboptimal inventory policy. Operational statistics, introduced in this paper, provides a better solution by integrating the estimation and the optimization tasks.

Original language	English
Pages (from-to)	341-348
Number of pages	8
Journal	Operations Research Letters
Volume	33
Issue number	4
DOIs	https://doi.org/10.1016/j.orl.2004.08.003
Publication status	Published - 2005

Keywords

inventory control
statistics

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10.1016/j.orl.2004.08.003

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title = "A practical inventory control policy using operational statistics",

abstract = "Consider the newsvendor inventory control problem with an ambiguous demand. The traditional approach of separating the parameter estimation and the maximization of the expected profit leads to a suboptimal inventory policy. Operational statistics, introduced in this paper, provides a better solution by integrating the estimation and the optimization tasks.",

keywords = "inventory control, statistics",

author = "Liyanage, \{Liwan H.\} and Shanthikumar, \{J. George\}",

year = "2005",

doi = "10.1016/j.orl.2004.08.003",

language = "English",

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journal = "Operations Research Letters",

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AU - Liyanage, Liwan H.

AU - Shanthikumar, J. George

PY - 2005

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N2 - Consider the newsvendor inventory control problem with an ambiguous demand. The traditional approach of separating the parameter estimation and the maximization of the expected profit leads to a suboptimal inventory policy. Operational statistics, introduced in this paper, provides a better solution by integrating the estimation and the optimization tasks.

AB - Consider the newsvendor inventory control problem with an ambiguous demand. The traditional approach of separating the parameter estimation and the maximization of the expected profit leads to a suboptimal inventory policy. Operational statistics, introduced in this paper, provides a better solution by integrating the estimation and the optimization tasks.

KW - inventory control

KW - statistics

UR - http://handle.uws.edu.au:8081/1959.7/uws:37744

U2 - 10.1016/j.orl.2004.08.003

DO - 10.1016/j.orl.2004.08.003

M3 - Article

SN - 0167-6377

VL - 33

SP - 341

EP - 348

JO - Operations Research Letters

JF - Operations Research Letters

IS - 4

ER -

A practical inventory control policy using operational statistics

Abstract

Keywords

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