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IESE Research Papers,
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No D/719: Myopic inventory policies using individual customer arrival information

Victor Martinez de Albeniz () and Alejandro Lago
Additional contact information
Victor Martinez de Albeniz: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Alejandro Lago: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

Abstract: We investigate optimality of myopic policies using the single-unit decomposition approach in inventory management. We derive, under certain conditions, closed-form replenishment decisions, which we call a base-probability policy. That is, the order associated with a given customer is placed if and only if its arrival probability within the lead-time is higher than a threshold.

Keywords: inventory management; base-stock policies; myopic policies

15 pages, November 17, 2007

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DI-0719-E.pdf PDF-file

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