Cores of Inventory Centralization Games

Bruce C. Hartman, Moshe Dror, Moshe Shaked

Research output: Contribution to journalArticle

84 Scopus citations

Abstract

Consider a set of n stores with single-item and single-period demands. Assume an option of centralized ordering and inventory with holding and penalty costs only. In this case, a cooperative inventory "centralization" game "defines" allocations of the cost. We examine the conditions under which such an inventory centralization game has a nonempty core. We prove the existence of nonempty core for demands with symmetric distributions and the existence of nonempty core for joint multivariate normal demand distribution. We establish the equivalency of four different nonempty core conditions for the Newsboy Problem and demonstrate their efficacy for discrete independent and identically distributed (iid) demands. Journal of Economic Literature Classification Numbers: C44, C62, C71.

Original languageEnglish (US)
Pages (from-to)26-49
Number of pages24
JournalGames and Economic Behavior
Volume31
Issue number1
DOIs
StatePublished - Apr 1 2000

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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