Inventory Management

Dukwon Kim and Boghos D. Sivazlian

ABSTRACT

Inventory management has been one of the most important areas in optimization theory and in practical applications to various industries. Optimizing inventories becomes more complex and sophisticated as the number of parameters to be controlled increases. For example, in supply-chain management, integrating the inventory-production systems as well as transportation and information systems is a very challenging problem in the area of applied optimization. This is due not only to the size of the problem but also to the problem structure (typically minimizing concave cost functions). In order to understand this attractive application, we study some fundamental inventory models as well as inventory models associated with the integrated supply-chain system. In addition, an interesting solution approach for this application is briefly presented.