Design and Optimization of Risk-Averse Inventory Control System with Supply-Side Uncertainty: Randomness, Computation, and Air Freight

Abstract

We survey single-period and multi-period inventory control systems for risk-averse decision-makers where supply-side uncertainties are considered. We start with introducing the concept of risk aversion, then discuss single-period models and multi-period models, and finally summarize how supply-side uncertainty may impact risk-averse inventory systems. We provide future directions for researchers in this area such as using air freight to reduce supply-side uncertainty.