Infinite horizon optimal policy for an inventory system with two types of product sharing common hardware platforms

Mabel C. Chou, Chee Khian Sim, Xue-Ming Yuan

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Abstract

We consider a periodic review inventory system and present its optimal policy in
the infinite horizon setting. The optimal inventory policy that maximizes the infinite
horizon expected discounted prot for the model is analytically obtained by relating to the finite horizon setting using results from variational analysis. Results are provided that elucidate the operations of the inventory system in the long run.
Original languageEnglish
Pages (from-to)12-18
Number of pages7
JournalOperations Research Letters
Volume45
Issue number1
Early online date3 Nov 2016
DOIs
Publication statusPublished - 2 Jan 2017

Keywords

  • dynamic programming
  • inventory control
  • lateral transshipment
  • optimal policy
  • variational analysis

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