We consider a finite-horizon, multiechelon inventory system in which the surplus of stock can be sold (i.e., disposed) in the secondary markets at each stage in the system. What are called <i>nested echelon order-up-to policies</i> are shown to be optimal for jointly managing inventory replenishments...

This paper investigates optimal production and selling decisions for a single supplier with two types of customers. Specifically, risk-averse buyers would rather pay higher fixed prices with guaranteed supply contracts whereas risk-prone buyers prefer to secure remaining stocks and pay lower...

Dynamic programming techniques are often used in economy due to the recursive structure that many dynamic economic optimization problems have. These problems, usually having a complex form, are disintegrated into smaller sub-problems whose optimal solutions lead to the optimal solution of the...