Robust Inventory Financing Model with Partial Information
Given current fast-changing market conditions and difficulty in obtaining financing for small- and medium-sized enterprises, this paper studies the robust inventory financing model under partial information, that is, where the demand distribution is partly known. Two demand information cases are dis...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2014-01-01
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| Series: | Journal of Applied Mathematics |
| Online Access: | http://dx.doi.org/10.1155/2014/236083 |
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| _version_ | 1832553190510297088 |
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| author | Yong Wang Jixiang Zhou Hailei Sun Lin Jiang |
| author_facet | Yong Wang Jixiang Zhou Hailei Sun Lin Jiang |
| author_sort | Yong Wang |
| collection | DOAJ |
| description | Given current fast-changing market conditions and difficulty in obtaining
financing for small- and medium-sized enterprises, this paper studies the robust inventory
financing model under partial information, that is, where the demand distribution is partly
known. Two demand information cases are discussed: (1) the mean and variance and
(2) the support of the demand distribution. In this setting, the robust method that
maximizes the worst-case profit and minimizes the firm’s maximum possible regret of not
acting optimally would be used to formulate the optimal sales quantity. We show that
the approach used in this paper is tractable, and we provide an explicit expression for
the robust optimal policy. We then use numerical examples to compare the firm’s losses
under two demand information cases with those occurring under demand certainty. More
importantly, the numerical examples indicate that our robust inventory financing model
can obtain a robust but not conservative solution. |
| format | Article |
| id | doaj-art-50a0d4102cbc4ef69c599c51eea89c29 |
| institution | Kabale University |
| issn | 1110-757X 1687-0042 |
| language | English |
| publishDate | 2014-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Applied Mathematics |
| spelling | doaj-art-50a0d4102cbc4ef69c599c51eea89c292025-02-03T05:55:17ZengWileyJournal of Applied Mathematics1110-757X1687-00422014-01-01201410.1155/2014/236083236083Robust Inventory Financing Model with Partial InformationYong Wang0Jixiang Zhou1Hailei Sun2Lin Jiang3School of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaSchool of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaSchool of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaSchool of Mathematics and Information Engineering, Chongqing University of Education, Chongqing 400067, ChinaGiven current fast-changing market conditions and difficulty in obtaining financing for small- and medium-sized enterprises, this paper studies the robust inventory financing model under partial information, that is, where the demand distribution is partly known. Two demand information cases are discussed: (1) the mean and variance and (2) the support of the demand distribution. In this setting, the robust method that maximizes the worst-case profit and minimizes the firm’s maximum possible regret of not acting optimally would be used to formulate the optimal sales quantity. We show that the approach used in this paper is tractable, and we provide an explicit expression for the robust optimal policy. We then use numerical examples to compare the firm’s losses under two demand information cases with those occurring under demand certainty. More importantly, the numerical examples indicate that our robust inventory financing model can obtain a robust but not conservative solution.http://dx.doi.org/10.1155/2014/236083 |
| spellingShingle | Yong Wang Jixiang Zhou Hailei Sun Lin Jiang Robust Inventory Financing Model with Partial Information Journal of Applied Mathematics |
| title | Robust Inventory Financing Model with Partial Information |
| title_full | Robust Inventory Financing Model with Partial Information |
| title_fullStr | Robust Inventory Financing Model with Partial Information |
| title_full_unstemmed | Robust Inventory Financing Model with Partial Information |
| title_short | Robust Inventory Financing Model with Partial Information |
| title_sort | robust inventory financing model with partial information |
| url | http://dx.doi.org/10.1155/2014/236083 |
| work_keys_str_mv | AT yongwang robustinventoryfinancingmodelwithpartialinformation AT jixiangzhou robustinventoryfinancingmodelwithpartialinformation AT haileisun robustinventoryfinancingmodelwithpartialinformation AT linjiang robustinventoryfinancingmodelwithpartialinformation |