Newsvendor equations for optimal reorder levels of serial inventory systems with fixed batch sizes

Newsvendor equations for optimal reorder levels of serial inventory systems with fixed batch sizes

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Article ID: iaor20102889
Volume: 36
Issue: 5
Start Page Number: 551
End Page Number: 556
Publication Date: Sep 2008
Journal: Operations Research Letters
Authors: , ,
Keywords: newsboy problem
Abstract:

We consider a stochastic serial inventory system with a given fixed batch size per stage and linear inventory holding and penalty costs. For this system, echelon stock (R, nQ) policies are known to be optimal. On the basis of new average costs formulas, we obtain newsvendor equations for the optimal reorder levels.

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