Approximation Algorithms for Capacitated Perishable Inventory Systems with Positive Lead Times
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AbstractManaging perishable inventory systems with positive lead times and finite ordering capacities is important but notoriously difficult in both theory and computation. The optimal control policy is extremely complicated, and no effective heuristic policy has been proposed in the literature. In this paper, we develop an easy-to-compute approximation algorithm for this class of problems and prove that it admits a theoretical worst-case performance guarantee under independent and many commonly used positively correlated demand processes. Our worst-case analysis departs significantly from those in the previous studies, requiring several novel ideas. In particular, we introduce a transient unit-matching rule to dynamically match the supply and demand units, and the notion of associated demand processes that provides the right future demand information to establish the desired results. Our numerical study demonstrates the effectiveness of the proposed algorithm.
Acceptance Date10/06/2017
All Author(s) ListXiuli CHAO, Xiting GONG, Cong SHI, Chaolin YANG, Huanan ZHANG, Sean X. ZHOU
Journal nameManagement Science
Year2018
Month11
Volume Number64
Issue Number11
Pages5038 - 5061
ISSN0025-1909
eISSN1526-5501
LanguagesEnglish-United States

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