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A new approach to two-location joint inventory and transshipment control via \(L^{\text{natural}}\)-convexity. (English) Zbl 1408.90005
Summary: We provide a new approach to the analysis of the optimal joint inventory and transshipment control with uncertain capacities by employing the concept of \(L^{\text{natural}}\)-convexity. In this approach, we use variable transformation techniques and apply two recent results to establish the \(L^{\text{natural}}\)-concavity of the profit-to-go functions, which significantly simplifies the analysis in the existing literature. Some variations of the basic model can also be analyzed using our approach with minor modifications.

90B05 Inventory, storage, reservoirs
90C27 Combinatorial optimization
90C39 Dynamic programming
Full Text: DOI
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