The Classical Average-Cost Inventory Models of Iglehart and Veinott–Wagner Revisited

D. Beyer and Suresh Sethi
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D. Beyer: Hewlett-Packard Laboratories

Journal of Optimization Theory and Applications, 1999, vol. 101, issue 3, No 2, 523-555

Abstract: Abstract This paper revisits the classical papers of Iglehart (Ref. 1) and Veinott and Wagner (Ref. 2) devoted to stochastic inventory problems with the criterion of long-run average cost minimization. We indicate some of the assumptions that are used implicitly without verification in their stationary distribution approach to the problems and provide the missing (nontrivial) verification. In addition to completing their analysis, we examine the relationship between the stationary distribution approach and the dynamic programming approach to the average-cost stochastic inventory problems.

Keywords: Dynamic inventory models; long-run average costs; (s; S) policy; infinite horizon; stationary analysis (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (7)

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DOI: 10.1023/A:1021734003033

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