This paper studies the optimization of the (<i>S</i>, <i>T</i>) inventory policy, where <i>T</i> is the replenishment interval and <i>S</i> is the order-up-to level. First, we demonstrate that the previously established joint convexity of the long-run average cost is false. Hence, the optimization is not straightforward....

The Lerner relationship linking the profit-maximizing price to marginal cost and the elasticity of demand generalizes to the price-setting newsvendor, and the result resolves the puzzle over the different effects of additive and multiplicative uncertainty on the solution. Multiplicative...

Material Requirements Planning or Manufacturing Resource Planning (MRP) systems originally were designed for a deterministic environment. Often, however, demand for finished products is uncertain and some type of buffering mechanism is necessary to provide desired levels of service. When the...

This paper examines a two-level distribution system consisting of a central warehouse (CW) supplying several branch warehouses (BW's), which, in turn, supply normally-distributed customer demands in a periodic-review environment. The CW replenishes system inventory using a base-stock...

In many military and commercial contexts, complex equipment undergoes scheduled maintenance overhauls at regular intervals during which all failed components are replaced. Failure to have replacements on hand for all failed parts requires emergency measures at premium cost. When reparable parts...

This paper extends the deterministic EOQ model to reflect various optimizing criteria and alternative demand and price structures. Its primary purpose is to develop decision rules for the management of finished goods inventories, especially in retailing, where inventories are evaluated in the...

This paper presents a model of an (s, S) inventory system in which there are two priority classes of customers. The model treats excess demands as lost sales and can accommodate an arbitrary deterministic lead time. After considering the associated Markov-chain model, an approximate,...

A model is formulated for optimizing multi-item inventories for repair of field equipment based on holding costs and the probability of job completion without stockout. This results in a different type of objective function from those found in most inventory problems in that the contributions of...

This paper analyzes the impact of forecasting on inventory decisions in a large physical distribution system. Alternative forecasting models are evaluated by developing tradeoff curves between inventory investment and customer service. The results demonstrate that the choice of forecasting model...

This paper extends recent results of Baker et al. (Baker, K. R., M. J. Magazine, H. L. W. Nuttle. 1986. The effect of commonality on safety stocks in a simple inventory model. Management Sci. 32 982--988.) in understanding the impact of component commonality on stocking levels under service...