A stochastic programming duality approach to inventory centralization games

Xin Chen, Jiawei Zhang

Research output: Contribution to journalArticlepeer-review


In this paper, we present a unified approach to study a class of cooperative games arising from inventory centralization. The optimization problems corresponding to the inventory games are formulated as stochastic programs. We observe that the strong duality of stochastic linear programming not only directly leads to a series of recent results concerning the nonemptiness of the core of such games, but also suggests a way to find an element in the core. The proposed approach is also applied to inventory games with concave ordering cost. In particular, we show that the newsvendor game with concave ordering cost has a nonempty core. Finally, we prove that it is NP-hard to determine whether a given allocation is in the core of the inventory games even in a very simple setting.

Original languageEnglish (US)
Pages (from-to)840-851
Number of pages12
JournalOperations Research
Issue number4
StatePublished - Jul 2009


  • Cooperative games
  • Inventory centralization
  • Stochastic programming

ASJC Scopus subject areas

  • Computer Science Applications
  • Management Science and Operations Research


Dive into the research topics of 'A stochastic programming duality approach to inventory centralization games'. Together they form a unique fingerprint.

Cite this