Monotonicity properties of a class of stochastic inventory systems

Awi Federgruen and Min Wang ()

Annals of Operations Research, 2013, vol. 208, issue 1, 155-186

Abstract: We consider inventory systems which are governed by an (r,q) or (r,nq) policy. We derive general conditions for monotonicity of the three optimal policy parameters, i.e., the optimal reorder level, order quantity and order-up-to level, as well as the optimal cost value, as a function of the various model primitives, be it cost parameters or complete cost rate functions or characteristics of the demand and leadtime processes. These results are obtained as corollaries from a few general theorems, with separate treatment given to the case where the policy parameters are continuous variables and that where they need to be restricted to integer values. The results are applied both to standard inventory models and to those with general shelf age and delay dependent inventory costs. Copyright Springer Science+Business Media, LLC 2013

Keywords: (r; q) Systems; Monotonicity properties; Standard inventory models; Shelf age and delay dependent inventory cost models (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s10479-012-1125-2

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