Optimal Inventory Policies When Sales Are Discretionary

Inventory 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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Year of publication:	2000-08
Authors:	Scarf, Herbert E.
Institutions:	Cowles Foundation for Research in Economics, Yale University
Subject:	Inventory theory \| optimal ordering policies \| (S \| s) policies \| K-concavity

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Extent:	application/pdf
Series:	Cowles Foundation Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	CFP 1104. Published in International Journal of Production Economics (January 2005), 93-94: 111-119 The price is None Number 1270 10 pages
Classification:	C12 - Hypothesis Testing ; C13 - Estimation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004990717