Service differentiation in a single-period inventory model with numerous customer classes

Benedikt Schulte () and Richard Pibernik
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Benedikt Schulte: Wuerzburg University
Richard Pibernik: Wuerzburg University

OR Spectrum: Quantitative Approaches in Management, 2016, vol. 38, issue 4, No 5, 948 pages

Abstract: Abstract We study critical-level inventory-management policies as means to provide differentiated ( $$\alpha $$ α and $$\beta $$ β ) service levels to more than two classes of customers. First, we derive closed-form expressions for the service levels of a single-period critical-level policy with an arbitrary number of customer classes (with Poisson demand). Based on the service-level expressions, we derive additional structural insights and provide an efficient algorithm with which to compute the essential system parameters, that is, the minimum required starting inventory and the associated critical levels. Based on these results, we conduct numerical experiments and develop structural insights into the system’s behavior.

Keywords: Inventory; Rationing; Service differentiation (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s00291-016-0432-4

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