Myopic inventory policies using individual customer arrival information

Victor Martinez de Albeniz () and Alejandro Lago
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Victor Martinez de Albeniz: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Alejandro Lago: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

No D/719, IESE Research Papers from IESE Business School

Abstract: We investigate optimality of myopic policies using the single-unit decomposition approach in inventory management. We derive, under certain conditions, closed-form replenishment decisions, which we call a base-probability policy. That is, the order associated with a given customer is placed if and only if its arrival probability within the lead-time is higher than a threshold.

Keywords: inventory management; base-stock policies; myopic policies (search for similar items in EconPapers)
Pages: 15 pages
Date: 2007-11-17
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0719

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