Article ID: | iaor2009173 |
Country: | Germany |
Volume: | 12 |
Issue: | 2 |
Start Page Number: | 117 |
End Page Number: | 127 |
Publication Date: | Jun 2004 |
Journal: | Central European Journal of Operations Research |
Authors: | Inderfurth Karl |
Keywords: | inventory |
The problem of determining the optimal production policy is addressed for a single-period production–inventory problem when both demand and production yield are stochastic. For uniformly distributed demand and yield the optimal policy is derived analytically. It is shown that, in contrast to that which is stated in literature, this policy can be of a non-linear type. Managerial aspects regarding this policy property are also discussed.