Discrete Convex Analysis and Its Applications in Operations: A Survey

48 Pages Posted: 31 Mar 2020

See all articles by Xin Chen

Xin Chen

Georgia Institute of Technology - H. Milton Stewart School of Industrial and Systems Engineering

Menglong Li

City University of Hong Kong (CityU) - Department of Management Sciences

Date Written: December 3, 2019

Abstract

Discrete convexity, in particular, L-natural-convexity and M-natural-convexity, provides a critical opening to attack several classical problems in inventory theory, as well as many other operations problems that arise from more recent practices, for instance, appointment scheduling and bike-sharing. As a powerful framework, discrete convex analysis is becoming increasingly popular in the literature. This review will survey the landscape of the approach. We start by introducing several key concepts, namely, L-natural-convexity and M-natural-convexity and their variants, followed by a discussion of some fundamental properties that are most useful for studying operations models. We then illustrate various applications of these concepts and properties. Examples include network flow problem, stochastic inventory control, appointment scheduling, game theory, portfolio contract, discrete choice model, and bike-sharing. We focus our discussion on demonstrating how discrete convex analysis can shed new insights on existing problems, and/or bring about much simpler analyses and algorithm developments than previous methods in the literature. We also present several results and analyses that are new to the literature.

Keywords: Discrete convexity, inventory management, appointment scheduling, bike-sharing

Suggested Citation

Chen, Xin and Li, Menglong, Discrete Convex Analysis and Its Applications in Operations: A Survey (December 3, 2019). Available at SSRN: https://ssrn.com/abstract=3549628 or http://dx.doi.org/10.2139/ssrn.3549628

Xin Chen

Georgia Institute of Technology - H. Milton Stewart School of Industrial and Systems Engineering ( email )

Menglong Li (Contact Author)

City University of Hong Kong (CityU) - Department of Management Sciences ( email )

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