This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Google Scholar Articles by Halman, N. Articles by Simchi-Levi, D.

A Fully Polynomial-Time Approximation Scheme for Single-Item Stochastic Inventory Control with Discrete Demand

Department of Civil and Environmental Engineering, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139, and School of Business Administration, Hebrew University of Jerusalem, Mount Scopus 91905, Israel
Department of Industrial and Management Sciences, Northwestern University, Evanston, Illinois 60208
Division of Humanities and Social Sciences, California Institute of Technology, Pasadena, California 91125
Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
Department of Civil and Environmental Engineering, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
halman{at}mit.edu
halman{at}huji.ac.il
d-klabjan{at}northwestern.edu
mosta{at}hss.caltech.edu
jorlin{at}mit.edu
dslevi{at}mit.edu

The single-item stochastic inventory control problem is to find an inventory replenishment policy in the presence of independent discrete stochastic demands under periodic review and finite time horizon. In this paper, we prove that this problem is intractable and design for it a fully polynomial-time approximation scheme.

Key Words: stochastic inventory management; approximation algorithms; stochastic dynamic programming
History: Received: March 10, 2006; revision received: March 3, 2009;