Optimal Multiperiod Inventory Decisions with Partially Observed Markovian Supply Information

• A new model for supply capacity forecast based on partial supply information:

• if the ordering quantity is greater than the current period supply capacity, the buyer observes the value of the current period supply capacity

• otherwise, the buyer knows that the current period supply capacity is greater than its ordering quantity.

• Optimal inventory policy• Existence• Uniqueness

Haifeng Wang CFINS, Dept. of Automation, Tsinghua University, Beijing, China

Houmin Yan Dept. of SEEM, the Chinese University of Hong Kong

Demand forecast

Supply forecast

Inventory control

Maintain a high customer-service rate without holding too much leftover inventory

How to use censored historical data on supply

capacity?