Article ID: | iaor199534 |
Country: | United States |
Volume: | 42 |
Issue: | 4 |
Start Page Number: | 721 |
End Page Number: | 738 |
Publication Date: | Jul 1994 |
Journal: | Operations Research |
Authors: | Zheng Yu-sheng |
Keywords: | stochastic processes |
This paper studies a single-item continuous-review inventory system with Poisson demand. In addition to the standard cost structure of a fixed setup cost and a quasiconvex expected inventory holding and shortage cost, special opportunities for placing orders at a discounted setup cost occur according to a Poisson process that is independent of the demand process. This model has been studied as a subproblem of multi-item/location inventory systems where there are economies-of-scale in joint replenishment. For the single-item model, the literature proposes the (