Management Science and Financial Engineering

The Korean Operations Research and Management Science Society (한국경영과학회)
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An Alternative Approach to the Robust Inventory Control Problem

  • Received : 2014.06.03
  • Accepted : 2014.08.06
  • Published : 2014.11.30
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Abstract

The robust inventory control problem was proposed and solved by Bertsimas and Thiele (2006). Their results are very interesting in that the problem can be solved easily and also the solution possesses nice properties of those found in the traditional stochastic inventory control problem. However, their formulation is shown to be incorrect, which invalidates all of the results given there. In this paper, we propose an alternative formulation of the problem which uses a different but practically applicable uncertainty set. Under the newly proposed model, all of the useful properties given in Bertsimas and Thiele (2006) will be shown to be valid.

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References

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