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Finding optimal policies in the (S - 1, S ) lost sales inventory model with multiple demand classes

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  • van Jaarsveld, W.L.
  • Dekker, R.

Abstract

This paper examines the algorithms proposed in the literature for finding good critical level policies in the (S-1,S) lost sales inventory model with multiple demand classes. Our main result is that we establish guaranteed optimality for two of these algorithms. This result is extended to different resupply assumptions, such as a single server queue. As a corollary, we provide an alternative proof of the optimality of critical level policies among the class of all policies.

Suggested Citation

  • van Jaarsveld, W.L. & Dekker, R., 2009. "Finding optimal policies in the (S - 1, S ) lost sales inventory model with multiple demand classes," Econometric Institute Research Papers EI 2009-14, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    • Handle: RePEc:ems:eureir:16265
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    References listed on IDEAS

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    Keywords

    customer differentiation; inventory; multiple demand classes; rationing lost sales; stochastic dynamic programming;
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