Improved Online Algorithms for Inventory Management Problems with Holding and Delay Costs: Riding the Wave Makes Things Simpler, Stronger, & More General

TL;DR

This paper introduces a new primal-dual online algorithm for inventory management that improves the competitive ratio from 30 to 5 for the joint replenishment problem with non-uniform costs, simplifying and generalizing previous models.

Contribution

It presents a 5-competitive online algorithm for the JRP with arbitrary monotone demand-specific costs, relaxing uniformity assumptions and improving competitive bounds.

Findings

Achieved a 5-competitive ratio for the generalized JRP.

Extended the ranking strategy to non-uniform cost functions.

Provided a new algorithm for the single-item lot-sizing problem with ratio approximately 2.681.

Abstract

The Joint Replenishment Problem (JRP) is a classical inventory management problem, that aims to model the trade-off between coordinating orders for multiple commodities (and their cost) with holding costs incurred by meeting demand in advance. Moseley, Niaparast and Ravi introduced a natural online generalization of the JRP in which inventory corresponding to demands may be replenished late, for a delay cost, or early, for a holding cost. They established that when the holding and delay costs are monotone and uniform across demands, there is a 30-competitive algorithm that employs a greedy strategy and a dual-fitting based analysis. We develop a 5-competitive algorithm that handles arbitrary monotone demand-specific holding and delay cost functions, thus simultaneously improving upon the competitive ratio and relaxing the uniformity assumption. Our primal-dual algorithm is in the spirit of the work Buchbinder, Kimbrel, Levi, Makarychev, and Sviridenko, which maintains a wavefront dual solution to decide when to place an order and which items to order. The main twist is in deciding which requests to serve early. In contrast to the work of Moseley et al., which ranks early requests in ascending order of desired service time and serves them until their total holding cost matches the ordering cost incurred for that item, we extend to the non-uniform case by instead ranking in ascending order of when the delay cost of a demand would reach its current holding cost. An important special case of the JRP is the single-item lot-sizing problem. Here, Moseley et al. gave a 3-competitive algorithm when the holding and delay costs are uniform across demands. We provide a new algorithm for which the competitive ratio is $\phi +1 \approx 2.681$, where $\phi$ is the golden ratio, which again holds for arbitrary monotone holding-delay costs.