Article1963

Optimality of ( s , S ) Policies in the Infinite Horizon Dynamic Inventory Problem

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Supply Chain and Inventory Management Management and Optimization Techniques Optimization and Search Problems

Abstract

The optimal ordering policy for a n-period dynamic inventory problem in which the ordering cost is linear plus a fixed reorder cost and the other one-period costs are convex is characterized by a pair of critical numbers, (s n , S n ); see Scarf, [4]. In this paper we give bounds for the sequences {s n } and {S n } and discuss their limiting behavior. The limiting (s, S) policy characterizes the optimal ordering policy for the infinite horizon problem. Similar results are obtained if there is a time-lag in delivery.

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References

2005The Optimality of (S,s) Policies in the Dynamic Inventory Problem 1960Studies in the Mathematical Theory of Inventory and Production

Cited by

1966On the Opimality of $( {s,S} )$ Inventory Policies: New Conditions and a New Proof 2001Integrating Replenishment Decisions with Advance Demand Information 1966The Status of Mathematical Inventory Theory 2004Coordinating Inventory Control and Pricing Strategies with Random Demand and Fixed Ordering Cost: The Infinite Horizon Case 1994Lower Bounds for Multi-Echelon Stochastic Inventory Systems 1985The Variability of Aggregate Demand with (S, s) Inventory Policies 2003On optimal inventory control with independent stochastic item returns 1990Chapter 12 Stochastic inventory theory

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