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New bounds of (s, S) policies in periodical review inventory systems

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Journal of Shanghai University (English Edition)

Abstract

We study the stochastic inventory problem with optimal (s, S) policies. In a finite horizon model with lost sales, we establish new lower and upper bounds of s and S. These bounds have structural implications for the optimal solutions. Consequently, when demand has a generalized phase type distribution, there are no more than a pre-determined number of minima. Similar bounds can also be found for the system where unsatisfied demand is backordered instead of lost sales.

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Authors and Affiliations

  1. School of Management, Shanghai University, Shanghai, 200444, P. R. China

    Yan-yi Xu  (徐燕翼)

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  1. Yan-yi Xu  (徐燕翼)
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Correspondence to Yan-yi Xu  (徐燕翼).

Additional information

Communicated by JIAO Zheng

Project supported by the Shanghai Excellent Junior Faculty Foundation

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Xu, Yy. New bounds of (s, S) policies in periodical review inventory systems. J. Shanghai Univ.(Engl. Ed.) 14, 111–115 (2010). https://doi.org/10.1007/s11741-010-0207-2

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  • DOI: https://doi.org/10.1007/s11741-010-0207-2

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