Discrete Sliding-Mode Control of Inventory Systems with Deteriorating Stock and Remote Supply Source

Abstract

In this paper we propose control-theoretic approach for the design of inventory management policy for systems with perishable goods. We consider periodic-review systems with uncertain, time-varying demand. The challenging issue in this type of systems is to achieve high service level with minimum costs for arbitrary demand pattern when the stock replenishment orders are procured with nonnegligible delay. In contrast to the classical, stochastic approaches, we employ a formal design methodology based on discrete sliding-mode (DSM) control. The proposed DSM controller with the sliding plane selected for a dead-beat scheme ensures the maximum service level (full demand satisfaction from the readily available resources) with smaller holding costs and reduced order-to-demand variance ratio as compared to the classical order-up-to policy.