Good and bad news about the (S, T) policy

• Main Authors: Liu, Fang, Song, Jing-Sheng
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2013
• Subjects: Business
• Online Access: https://hdl.handle.net/10356/100791; http://hdl.handle.net/10220/18242
• Institution: Nanyang Technological University

This paper studies the optimization of the (S, T) inventory policy, where T is the replenishment interval and S is the order-up-to level. First, we demonstrate that the previously established joint convexity of the long-run average cost is false. Hence, the optimization is not straightforward. We th...