Optimal Policy in a Dynamic, Single Product, Nonstationary Inventory Model with Several Demand Classes

Arthur F. Veinott
Additional contact information
Arthur F. Veinott: Stanford University, Stanford, California

Operations Research, 1965, vol. 13, issue 5, 761-778

Abstract: A multiperiod single product nonstationary inventory problem is studied in which the system is reviewed at the beginning of each of a sequence of periods of equal length. The model has the following features. There are several classes of demand for the product in each period. The demands in different periods are independent but not necessarily identically distributed. The cost structure is nonstationary with the ordering cost being proportional to the amount ordered. Conditions are given that ensure that the base stock ordering policy is optimal and that the base stock levels in each period are easy to calculate. The results are based on the work given in the literature and on properties of stochastically ordered distributions that are developed in the paper. The case of a linear holding cost and a linear shortage cost is studied in detail.

Date: 1965
References: Add references at CitEc
Citations: View citations in EconPapers (68)

Downloads: (external link)
http://dx.doi.org/10.1287/opre.13.5.761 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:13:y:1965:i:5:p:761-778

Access Statistics for this article

More articles in Operations Research from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().