In this paper, we consider a stochastic inventory system of two products where a fi xed proportion of the unsatisfied ed demand for one product purchases the other product as a substitute. We formulate the optimal inventory control problem as a dynamic program; and by developing two key...

In this paper, we establish two preservation results of additive convexity for a class of optimal transformation problems and a class of optimal disposal problems. For both classes of problems, there are multiple resources and our results show that if these resources have different priorities to...

Motivated by emerging practice in the cut flower industry, we consider a periodic-review inventory system for a perishable product with a lifetime of two periods. There are two separate customer demands for the new product with two-period remaining lifetime and the old product with one-period...

We consider an infinite-horizon lost-sales inventory model where the supply takes positive lead times and is a random function of the order quantity (e.g., random yield/capacity). The optimal policy for this model is computationally intractable; and no heuristic has been proposed in the...

This paper considers a stochastic inventory management problem where a capital-constrained firm can obtain additional working capital through an inventory-based financing facility by pledging its inventory to obtain loans from a lender. We show that it is optimal to deploy a state-dependent...

In this paper, we study hybrid manufacturing/remanufacturing inventory systems that produce a single product to satisfy random demands over a finite planning horizon. In each period, the firm receives random demand and random product returns. A serviceable product can be manufactured from raw...