Strong stability in an (R,s,S)inventory model

Strong stability in an (R,s,S)inventory model

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Article ID: iaor201526907
Volume: 97
Issue: 2
Start Page Number: 159
End Page Number: 171
Publication Date: Aug 2005
Journal: International Journal of Production Economics
Authors: ,
Keywords: stability
Abstract:

In this paper, we prove the applicability of the strong stability method to inventory models. Real life inventory problems are often very complicated and they are resolved only through approximations. Therefore, it is very important to justify these approximations and to estimate the resultant error. We study the strong stability in a periodic review inventory model with an ( R , s , S ) equ1 policy. After showing the strong v equ2‐stability of the underlying Markov chain with respect to the perturbation of the demand distribution, we obtain quantitative stability estimates with an exact computation of constants.

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