A Comparison of the Optimal Ordering Levels of Bayesian and Non-Bayesian Inventory Models,

Abstract

Although it is often the case that the parameters of the distribution of demand are not known with certainty and that a Bayesian formulation would be appropriate, such an approach is generally not used in inventory calculations for computational reasons. Since one often resorts to a non-Bayesian formulation, it is of interest to compare Bayesian policies with a comparable non-Bayesian policy. It was anticipated that the non-Bayesian policy (quantity ordered) would be an upper bound to the Bayesian policy. This result is established for a two-period standard inventory model and for the n-period non-depletive inventory model. However, a counterexample is given in the standard inventory model for an alternative comparable non-Bayesian formulation. (Author)

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Document Details

Document Type
Technical Report
Publication Date
Dec 01, 1979
Accession Number
ADA080599

Entities

People

  • Bruce L. Miller
  • Katy S. Azoury

Organizations

  • University of California, Los Angeles

Tags

Communities of Interest

  • Human Systems

DTIC Thesaurus Topics

  • Abstracts
  • Bayesian Networks
  • Business Administration
  • Distribution Functions
  • Dynamic Programming
  • Equations
  • Inventory
  • Inventory Control
  • Logistics
  • Mathematics
  • Military Research
  • Normal Distribution
  • Operations Research
  • Probability
  • Probability Distributions
  • Random Variables
  • Statistics

Fields of Study

  • Mathematics

Readers

  • Logistics and Supply Chain Management.
  • Operations Research
  • Statistical inference.

Technology Areas

  • AI & ML
  • AI & ML - Bayesian Inference
  • AI & ML - Machine Learning Algorithms