Article ID: | iaor2008636 |
Country: | United States |
Volume: | 54 |
Issue: | 2 |
Start Page Number: | 389 |
End Page Number: | 393 |
Publication Date: | Mar 2006 |
Journal: | Operations Research |
Authors: | Metters Richard, Semple John, Fox Edward J. |
Keywords: | programming: dynamic |
We analyze a periodic-review inventory model where the decision maker can buy from either of two suppliers. With the first supplier, the buyer incurs a high variable cost but negligible fixed cost; with the second supplier, the buyer incurs a lower variable cost but a substantial fixed cost. Consequently, ordering costs are piecewise linear and concave. We show that a reduced form of generalized (