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ON A STOCHASTIC INVENTORY MODEL WITH DETERIORATION AND STOCK-DEPENDENT DEMAND ITEMS

Published online by Cambridge University Press:  21 May 2002

Lakdere Benkherouf  and
Lakhdar Aggoun
Lakdere Benkherouf
Affiliation:
Department of Mathematics and Statistics, Sultan Qaboos University, Sultanate of Oman, E-mail: [email protected]
Lakhdar Aggoun
Affiliation:
Department of Mathematics and Statistics, Sultan Qaboos University, Sultanate of Oman, E-mail: [email protected]
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Abstract

In this article, we propose a new continuous-time stochastic inventory model with deterioration and stock-dependent demand items. We then formulate the problem of finding the optimal impulse control schedule that minimizes the total expected return over an infinite horizon, as a quasivariational inequality (QVI) problem. The QVI is shown to lead to an (s, S) policy, where s and S are determined uniquely as a solution of some algebraic equations.

Type
Research Article
Information
Probability in the Engineering and Informational Sciences , Volume 16 , Issue 2 , April 2002 , pp. 151 - 165
Copyright
© 2002 Cambridge University Press

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