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An improved online replenishment policy and its competitive ratio analysis for a purchase-to-order seller

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  • Guanqun Ni

    (Shandong University of Technology)

Abstract

For a purchase-to-order seller, there is no inventory and the seller has to purchase goods to fulfill orders already placed. For each purchase, there is a constant ordering cost. For each order, delay cost will be incurred if it is not fulfilled timely. Consequently, there is a tradeoff between the ordering cost and the delay cost for the seller to make replenishment decisions minimizing the total cost. In practice it is impossible or difficult for the seller to know demand information about future orders in advance, and thus this decision-making problem is of an online fashion. In the previous work, this online problem is classified into three cases according to capacity limit and demand quantity, and a 10-competitive online policy is proposed for the general case. In the present paper, an improved 4-competitive online policy is proposed. Besides, an asymptotic lower bound of 2 is derived for this online decision-making problem.

Suggested Citation

  • Guanqun Ni, 2023. "An improved online replenishment policy and its competitive ratio analysis for a purchase-to-order seller," Journal of Combinatorial Optimization, Springer, vol. 46(2), pages 1-14, September.
    • Handle: RePEc:spr:jcomop:v:46:y:2023:i:2:d:10.1007_s10878-023-01079-6
    DOI: 10.1007/s10878-023-01079-6
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    References listed on IDEAS

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