A Note on the Applicability of Federgruen and Zheng S Algorithm for Computing Optimal (R,Q) Inventory Policies

Posted: 29 Apr 1998

See all articles by Harry Groenevelt

Harry Groenevelt

Simon Graduate School of Business, University of Rochester

Lawrence W. Robinson

Cornell University - Samuel Curtis Johnson Graduate School of Management

Date Written: Undated

Abstract

Care must be taken in extending the formulation and solution methodology of Federgruen and Zheng (1992) to include a stockout cost of a different dimensionality: $/unit, rather than $/unit/year. Federgruen and Zheng formulate this extended model for Poisson demand. We modify their formulation to allow for a much broader class of demand processes, and show via counter examples that the elegant solution methodology developed in Federgruen and Zheng cannot be brought to bear upon the more general problems.

JEL Classification: C61, C63, L0

Suggested Citation

Groenevelt, Harry and Robinson, Lawrence W., A Note on the Applicability of Federgruen and Zheng S Algorithm for Computing Optimal (R,Q) Inventory Policies (Undated). Available at SSRN: https://ssrn.com/abstract=4116

Harry Groenevelt (Contact Author)

Simon Graduate School of Business, University of Rochester ( email )

Carol Simon Hall 3-339
Rochester, NY 14627
United States
585-275-2825 (Phone)
585-275-9331 (Fax)

Lawrence W. Robinson

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

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