Power-of-two single-warehouse multi-buyer inventory coordination with private information

This paper considers the problem of coordinating a single-warehouse multi-buyer inventory system with private information where the objective is to find a replenishment policy for each facility in the system such that the total average ordering and inventory-related cost of the entire system is minimized. It is assumed that the objective function, and setup and inventory holding cost parameters of each facility are regarded as private information that no other facilities in the system have access to. Moreover, each facility is responsible to specify its own replenishment for a given demand.