Partially Observed Inventory Systems: The Case of Zero-Balance Walk

  title={Partially Observed Inventory Systems: The Case of Zero-Balance Walk},
  author={Alain Bensoussan and Metin Çakanyildirim and Suresh P. Sethi},
  journal={SIAM J. Control and Optimization},
In many inventory control contexts, inventory levels are only partially (i.e., not fully) observed. This may be due to non-observation of demand, spoilage, misplacement, or theft of inventory. We study a partially observed inventory system where the demand is not observed, inventory level is noticed when it reaches zero, the unmet demand is lost, and replenishment orders must be decided so as to minimize the total discounted costs over an infinite horizon. This problem has an infinite… CONTINUE READING
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