Inventory control under substitutable demand: A stochastic game application

Download

index.pdf

Date

2002-06-01

Author

Avşar, Zeynep Müge

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

275
views

0
downloads

Substitutable product inventory problem is analyzed using the concepts of stochastic game theory. It is assumed that there are two substitutable products that are sold by different retailers and the demand for each product is random. Game theoretic nature of this problem is the result of substitution between products. Since retailers compete for the substitutable demand, ordering decision of each retailer depends on the ordering decision of the other retailer. Under the discounted payoff criterion, this problem is formulated as a two-person nonzero-sum stochastic game, In the case of linear ordering cost, it is shown that there exists a Nash equilibrium characterized by a pair of stationary base stock strategies for the infinite horizon problem. This is the unique Nash equilibrium within the class of stationary base stock strategies. (C) 2002 Wiley Periodicals, Inc.

Subject Keywords

Management Science and Operations Research, Modelling and Simulation, Ocean Engineering

URI

https://hdl.handle.net/11511/34519

Journal

NAVAL RESEARCH LOGISTICS

DOI

https://doi.org/10.1002/nav.10018

Collections

Department of Industrial Engineering, Article

Suggestions

OpenMETU
Core

Bank asset and liability management under uncertainty Oguzsoy, CB; Güven, Sibel (Elsevier BV, 1997-11-01) This study presents a multiperiod stochastic linear simple recourse model for asset and liability management in banking. The model determines the portfolio of assets and liabilities over the planning horizon given a set of deterministic rates of returns of investments and costs of borrowings, and a set of random outstanding deposit levels, liquidity and total reserve requirements with a given discrete probability distribution. The intention is to develop an optimization tool to assure sustained profitabilit...
THE SCHEDULING OF ACTIVITIES TO MAXIMIZE THE NET PRESENT VALUE OF PROJECTS - COMMENT SEPIL, C (Elsevier BV, 1994-02-24) In a recent paper, Elmaghraby and Herroelen have presented an algorithm to maximize the present value of a project. Here, with the help of an example, it is shown that the algorithm may not find the optimal solution.
The interval Shapley value: an axiomatization Gok, S. Z. Alparslan; Branzei, R.; Tijs, S. (Springer Science and Business Media LLC, 2010-06-01) The Shapley value, one of the most widespread concepts in operations Research applications of cooperative game theory, was defined and axiomatically characterized in different game-theoretic models. Recently much research work has been done in order to extend OR models and methods, in particular cooperative game theory, for situations with interval data. This paper focuses on the Shapley value for cooperative games where the set of players is finite and the coalition values are compact intervals of real num...
Stochastic differential games for optimal investment problems in a Markov regime-switching jump-diffusion market Savku, E.; Weber, Gerhard Wilhelm (Springer Science and Business Media LLC, 2020-08-01) We apply dynamic programming principle to discuss two optimal investment problems by using zero-sum and nonzero-sum stochastic game approaches in a continuous-time Markov regime-switching environment within the frame work of behavioral finance. We represent different states of an economy and, consequently, investors' floating levels of psychological reactions by aD-state Markov chain. The first application is a zero-sum game between an investor and the market, and the second one formulates a nonzero-sum sto...
Optimal lot-sizing/vehicle-dispatching policies under stochastic lead times and stepwise fixed costs Alp, O; Erkip, NK; Gullu, R (Institute for Operations Research and the Management Sciences (INFORMS), 2003-01-01) We characterize optimal policies of a dynamic lot-sizing/vehicle-dispatching problem under dynamic deterministic demands and stochastic lead times. An essential feature of the problem is the structure of the ordering cost, where a fixed cost is incurred every time a batch is initiated (or a vehicle is hired) regardless of the portion of the batch (or vehicle) utilized. Moreover, for every unit of demand not satisfied on time, holding and backorder costs are incurred. Under mild assumptions we show that the ...

Citation Formats

Z. M. Avşar, “Inventory control under substitutable demand: A stochastic game application,” NAVAL RESEARCH LOGISTICS, pp. 359–375, 2002, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/34519.