Article ID: | iaor200298 |
Country: | United States |
Volume: | 108 |
Issue: | 2 |
Start Page Number: | 253 |
End Page Number: | 281 |
Publication Date: | Feb 2001 |
Journal: | Journal of Optimization Theory and Applications |
Authors: | Zhang H., Sethi Suresh P., Yan H. |
This paper is concerned with a periodic review inventory system with fast and slow delivery modes and regular demand forecast updates. At the beginning of each period, on-hand inventory and demand information are updated. At the same time, decisions on how much to order using fast and slow delivery modes are made. Fast and slow orders are delivered at the end of the current and next periods, respectively. It is shown that there exists an optimal Markov policy and that it is a modified base-stock policy.