Accession Number:

ADA080599

Title:

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

Descriptive Note:

Corporate Author:

CALIFORNIA UNIV LOS ANGELES DEPT OF SYSTEM SCIENCE

Personal Author(s):

Report Date:

1979-12-01

Pagination or Media Count:

28.0

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

Subject Categories:

  • Statistics and Probability

Distribution Statement:

APPROVED FOR PUBLIC RELEASE