Competitive analysis of interrelated price online inventory problems with demands

Abstract

This paper investigates interrelated price online inventory problems, in which decisions as to when and how much of a product to replenish must be made in an online fashion to meet some demand even without a concrete knowledge of future prices. The objective of the decision maker is to minimize the total cost while meeting the demands. Two different types of demand are considered carefully, that is, demands which are linearly and exponentially related to price. In this paper, the prices are online, with only the price range variation known in advance, and are interrelated with the preceding price. Two models of price correlation are investigated, namely, an exponential model and a logarithmic model. The corresponding algorithms of the problems are developed, and the competitive ratios of the algorithms are derived as the solutions by use of linear programming. doi:10.1017/S144618111700013X