On the optimal policy structure in serial inventory systems with lost sales

On the optimal policy structure in serial inventory systems with lost sales

0.00 Avg rating0 Votes
Article ID: iaor20104028
Volume: 58
Issue: 2
Start Page Number: 486
End Page Number: 491
Publication Date: Mar 2010
Journal: Operations Research
Authors: ,
Keywords: lost sales
Abstract:

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 L-natural-convexity, which was studied in discrete convex analysis and recently used in the study of single-stage inventory systems with lost sales. We also remark on how our analysis extends to models with capacity constraints and/or backordering.

Reviews

Required fields are marked *. Your email address will not be published.