Applications of Stochastic Orders and Stochastic Functions in Inventory and Pricing Problems

• 成果类型: Article
• 署名作者: Feng, Qi; Shanthikumar, J. George
• 署名单位: Purdue University System; Purdue University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13629
• 发表日期: 2022
• 页码: 1433-1453
• 关键词: stochastic orders; parametric stochastic orders; stochastic functions; INVENTORY CONTROL; Dynamic pricing

摘要

Uncertainties involved in decision making often impose challenges to our ability of modeling and analyzing the reality. The purpose of this study is to demonstrate how one can go beyond the conventional optimization thinking, via taking a stochastic viewpoint, to push the boundaries of the analysis. We review the basic notions of stochastic orders and stochastic functions, with which the conventional (deterministic) way of modeling can be generalized. Based on the orders among distribution functions associated with random variables, we can treat the input-output relationship as stochastic functions in our models. This viewpoint, leads to extended functional properties in the stochastic sense. Taking the existing models involving inventory and pricing decisions, we show how the stochastic notions are powerful in simplifying and generalizing the analysis, as well as generating new insights.