Finding optimal (s,S) policies is about as simple as evaluating a single policy

Finding optimal (s,S) policies is about as simple as evaluating a single policy

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Article ID: iaor1993891
Country: United States
Volume: 39
Issue: 4
Start Page Number: 654
End Page Number: 665
Publication Date: Jul 1991
Journal: Operations Research
Authors: ,
Abstract:

In this paper, a new algorithm for computing optimal (s,S) policies is derived based upon a number of new properties of the infinite horizon cost function c(s,S) as well as a new upper bound for optimal order-up-to levels S* and a new lower bound for optimal reorder levels s*. The algorithm is simple and easy to understand. Its computational complexity is only 2.4 times that required to evaluate a (specific) single (s,S) policy. The algorithm applies to both periodic review and continuous review inventory systems.

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