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Competitive Analysis of the Online Inventory Problem

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  • Kim Skak Larsen, Department of Mathematics and Computer Science, University of Southern Denmark, Denmark
  • Sanne Wøhlk
  • CORAL - Centre for Operations Research Applications in Logistics
  • Department of Business Studies
We consider a real-time version of the inventory problem with deterministic demand in which decisions as to when to replenish and how much to buy must be made in an online fashion without knowledge of future prices. We suggest online algorithms for each of four models for the problem and use competitive analysis to obtain algorithmic upper and lower bounds on the worst case performance of the algorithms compared to an optimal offline algorithm. These bounds are closely related to the tight View the MathML source-bound obtained for the simplest of the models, where M and m are the upper and lower bounds on the price fluctuation.
Original languageEnglish
JournalEuropean Journal of Operational Research
Pages (from-to)685-696
Publication statusPublished - 2010

    Research areas

  • Inventory, Online algorithms, Competitive analysis

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