The origins of dynamic inventory modelling under uncertainty (the men, their work and connection with the Stanford Studies)

This paper has a double purpose. First, it provides a historical analysis of the developments leading to the first ‘Stanford Studies’, a collection of papers which probably can be considered even today as the single most fundamental reference in the mathematical handling of inventories. From this point of view, the paper is about people and their works. Secondly, we give an insight into the interrelation of mathematics and inventory modelling in a historical context. We will sketch, on the one hand, the development of the mathematical tools for inventory modelling first of all in statistics, probability theory and stochastic processes but also in game theory and dynamic programming up to the 1950s. Furthermore, we report how inventory problems have motivated the improvement of mathematical disciplines such as Markovian decision theory and optimal control of stochastic systems to provide a new basis inventory theory in the second half of our century.