All-or-nothing ordering under a capacity constraint

All-or-nothing ordering under a capacity constraint

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Article ID: iaor20073507
Country: United States
Volume: 52
Issue: 6
Start Page Number: 1001
End Page Number: 1002
Publication Date: Nov 2004
Journal: Operations Research
Authors: ,
Abstract:

We consider a special case of the single-item, periodic-review inventory control problem with fixed plus linear ordering costs and an upper bound on production capacity. We assume that the fixed cost is large relative to the variable cost and restrict our analysis to full-capacity orders. We show that the optimal policy is a threshold policy, with respect to the inventory position, for a class of cost-to-go functions that include the class of convex functions.

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