On properties of discrete (r, q) and (s, T) inventory systems

Marcus Ang, Jingsheng Song, Mingzheng Wang and Hanqin Zhang

European Journal of Operational Research, 2013, vol. 229, issue 1, 95-105

Abstract: We consider single-item (r, q) and (s, T) inventory systems with integer-valued demand processes. While most of the inventory literature studies continuous approximations of these models and establishes joint convexity properties of the policy parameters in the continuous space, we show that these properties no longer hold in the discrete space, in the sense of linear interpolation extension and L♮-convexity. This nonconvexity can lead to failure of optimization techniques based on local optimality to obtain the optimal inventory policies. It can also make certain comparative properties established previously using continuous variables invalid. We revise these properties in the discrete space.

Keywords: Inventory/production; (r, q) Policy; (s, T) Policy; Discrete convexity (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:229:y:2013:i:1:p:95-105

DOI: 10.1016/j.ejor.2013.02.054

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