Article ID: | iaor20042964 |
Country: | Netherlands |
Volume: | 151 |
Issue: | 1 |
Start Page Number: | 25 |
End Page Number: | 37 |
Publication Date: | Nov 2003 |
Journal: | European Journal of Operational Research |
Authors: | Kuik Roelof, Fleischmann Moritz |
Keywords: | optimization |
To a growing extent companies take recovery of used products into account in their material management. One aspect distinguishing inventory control in this context from traditional settings is an exogenous inbound material flow. We analyze the impact of this inbound flow on inventory control. To this end, we consider a single inventory point facing independent stochastic demand and item returns. This comes down to a variant of a traditional stochastic single-item inventory model where demand may be both positive and negative. Using general results on Markov decision processes we show average cost optimality of an (