Optimum Ordering Interval of Inventory with Random Price Functions: A Sample Path Analysis

Somdeb Lahiri

IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: In this paper we extend the analysis of optimum ordering interval for inventory, carried out by Mukherjee(2), to incorporate random price schedules observed by firms. We obtain the expression for optimum cycle length by minimizing the expected total cost per unit time. In effect we carry out a sample path analysis. We also study the relationship between optimal interval and probability distributions in the polar case of constant decay rate and a Bernoulli probability measure.

Date: 1987-07-01
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Persistent link: https://EconPapers.repec.org/RePEc:iim:iimawp:wp00768

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