We consider the optimality of the (s, S) policy for a periodic-review stochastic inventory problem with two types of shortage costs. The problem may arise in a rush-order application at a bank branch where the emergency provision costs during a foreign currency stockout are represented by...

One of the basic assumptions of the classical dynamic lot-sizing model is that theaggregate demand of a given period must be satisfied in that period. Under thisassumption, if backlogging is not allowed then the demand of a given period cannotbe delivered earlier or later than the period. If...