Article ID: | iaor20104028 |
Volume: | 58 |
Issue: | 2 |
Start Page Number: | 486 |
End Page Number: | 491 |
Publication Date: | Mar 2010 |
Journal: | Operations Research |
Authors: | Huh Woonghee Tim, Janakiraman Ganesh |
Keywords: | lost sales |
We study a periodically reviewed, serial inventory system in which excess demand from external customers is lost. We derive elementary properties of the vector of optimal order quantities in this system. In particular, we derive bounds on the sensitivity (or, more mathematically, the derivative) of the optimal order quantity at each stage to the vector of the current inventory levels. Our analysis uses the concept of