Optimal Inventory Policies When Sales Are Discretionary
AbstractInventory models customarily assume that demand is fully satisfied if sufficient stock is available. We analyze the form of the optimal inventory policy if the inventory manager can choose to meet a fraction of the demand. Under classical conditions we show that the optimal policy is again of the (S,s) form. The analysis makes use of a novel property of K-concave functions.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1270.
Length: 10 pages
Date of creation: Aug 2000
Date of revision:
Publication status: Published in International Journal of Production Economics (January 2005), 93-94: 111-119
Note: CFP 1104.
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Scarf, Herbert E., 2005. "Optimal inventory policies when sales are discretionary," International Journal of Production Economics, Elsevier, vol. 93(1), pages 111-119, January.
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- George Hall & John Rust, 2007. "The (S,s) Policy is an Optimal Trading Strategy in a Class of Commodity Price Speculation Problems," Economic Theory, Springer, vol. 30(3), pages 515-538, March.
- Mart, Turgut & Duran, Serhan & Bakal, İsmail Serdar, 2013. "Tactical inventory and backorder decisions for systems with predictable production yield," International Journal of Production Economics, Elsevier, vol. 143(2), pages 294-303.
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