Approximation Algorithms for Inventory Problems with Decomposable Submodular Ordering Costs

2026-07-23

AI Summary

This work addresses the multi-item joint replenishment problem over a finite planning horizon with deterministic demands and decomposable submodular ordering costs. The authors propose a rounding algorithm based on linear programming relaxation, which constructs nested partitions through marginal cost analysis and employs a novel water-filling procedure to convert fractional solutions into feasible integer schedules. When the number of item types \(k\) is fixed, this approach yields the first constant-factor approximation guarantee for a broad class of decomposable submodular cost functions, achieving an \(O(k)\)-approximation. This significantly expands the scope of inventory optimization models endowed with provable theoretical performance bounds.

Abstract

This paper develops an approximation algorithm for the submodular joint replenishment problem (SJRP) under a broad family of decomposable submodular ordering cost functions. In the SJRP, a central planner coordinates orders to satisfy deterministic demand for multiple items over a finite discrete planning horizon while minimizing total holding and ordering costs, with the latter modeled as a submodular function of the subset of items ordered in each period. The ordering cost functions considered in this paper are defined based on a decomposition of the items into $k$ categories, where the cost is a function of weighted aggregate quantities within each category and allows for arbitrary interactions across categories through a joint cost function. The proposed algorithm rounds the solution to a linear programming relaxation by partitioning the fractional solution into nested regions according to marginal costs using a novel water-filling procedure, and then selecting one order from each region to obtain a feasible integral schedule. The resulting algorithm achieves an $O(k)$-approximation. When the number of categories $k$ is fixed, this yields the first constant-factor guarantee for this broad class of submodular ordering costs, significantly expanding the class of cost functions for which such guarantees are known.

Problem

• submodular joint replenishment problem
• decomposable submodular ordering costs
• inventory optimization
• approximation algorithms
• multi-item inventory

Innovation

• submodular joint replenishment
• decomposable ordering costs
• approximation algorithm
• water-filling procedure
• linear programming rounding