Abstract
In this paper we study the structure of optimal policies for periodic review inventory systems with concave ordering costs and general demand distributions. By extending the Scarf () model to systems with piecewise linear concave ordering costs, we show that, except for a bounded region, the generalized (s, S) policy is optimal. We do so by (a) introducing the notion of c-convexity and (b) proving a conditional monotonicity property for the optimal order-up-to levels. We also provide conditions under which the generalized (s, S) policy is optimal for all regions of the state space.
Original language | English (US) |
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Pages (from-to) | 291-302 |
Number of pages | 12 |
Journal | Naval Research Logistics |
Volume | 65 |
Issue number | 4 |
DOIs | |
State | Published - Jun 2018 |
Bibliographical note
Publisher Copyright:© 2018 Wiley Periodicals, Inc.
Keywords
- (s, S) Policy
- c-convexity
- dynamic programming
- generalized
- inventory/production systems