Advertisement

Discounted Cost Models with Backorders

  • Dirk Beyer
  • Feng Cheng
  • Suresh P. Sethi
  • Michael Taksar
Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 108)

Abstract

One of the most important developments in the inventory theory has been to show that (s, S) policies are optimal for a class of dynamic inventory models with random periodic demands and fixed ordering costs. Under an (s, S) policy, if the inventory level at the beginning of a period is less than the reorder point s, then a sufficient quantity must be ordered to achieve an inventory level S, the order-up-to level, upon replenishment. There are a number of papers in the literature devoted to proving the optimality of (s, S) policies under a variety of assumptions. However, in real-life inventory problems, some of these assumptions do not hold. It is our purpose to relax these assumptions toward realism and still demonstrate the optimality of (s, S)-type policies.

Keywords

Optimal Policy Inventory Model Inventory Level Demand State Type Policy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer-Verlag US 2010

Authors and Affiliations

  • Dirk Beyer
    • 1
  • Feng Cheng
    • 2
  • Suresh P. Sethi
    • 3
  • Michael Taksar
    • 4
  1. 1.M-FactorSan MateoUSA
  2. 2.Federal Aviation AdministrationOffice of Performance Analysis and StrategyWashingtonUSA
  3. 3.School of Management, M/S SM30The University of Texas at DallasRichardsonUSA
  4. 4.Department of MathematicsUniversity of MissouriColumbiaUSA

Personalised recommendations