We consider a periodic review model where the firm manages its inventory under supply uncertainty and demand cancellation. We show that because of supply uncertainty, the optimal inventory policy has the structure of re-order point type. That is, we order if the initial inventory falls below...

Supply contracts often specify the quantity of inventory for shipments where retailers are liable to pay for ordering costs if order quantity exceeds the contracted size. We analyze a periodic review system where the firm manages its demand that are reserved with a one-period leadtime together...