Article ID: | iaor20107416 |
Volume: | 12 |
Issue: | 4 |
Start Page Number: | 663 |
End Page Number: | 672 |
Publication Date: | Sep 2010 |
Journal: | Manufacturing & Service Operations Management |
Authors: | Martnez-de-Albniz Victor, Lago Alejandro |
In this paper, we investigate the optimality of myopic inventory replenishment policies in a periodic-review single-echelon system, with nonstationary, correlated, stochastic demand and cost, and nonincreasing stochastic prices. Using the single-unit decomposition approach, we provide certain general conditions on the demand and cost processes under which a myopic policy is optimal. Under these conditions, the optimal policy is a myopic state-dependent base-stock policy, which can be expressed in closed form as a