In this paper, we examine the nature of optimal inventory policies in a system where a retailer manages substitutable products. We first consider a system with two products 1 and 2 whose total demand is D and individual demand proportions are p and (1-p). A fixed proportion of the unsatisfied customers for 1(2) will purchase item 2 (1), if it is available in inventory. For the single period cas...

This paper studies various approaches to demand learning in the context of a one-shot inventory replenishment problem with dynamic pricing. The customer arrival process is assumed to be piecewise deterministic and Markovian with an unknown parameter. Homogeneous customers have an iso-elastic demand function and do not behave strategically. We study full information, non-learning, passive learni...

T his paper studies echelon stock (R, nQ) policies in serial production/inventory systems with stochastic demand. We provide a recursive procedure to compute the steady state echelon inventory levels of the systems, which can be used to evaluate the long-run average holding and backorder costs as well as other performance measures. The procedure is based upon an observation of a relationship be...

The development of control-oriented decision policies for inventory management in supply chains has received considerable interest in recent years, and demand modeling to supply forecasts for these policies is an important component of an effective solution to this problem. Drawing from the problem of controlrelevant identification, we present an approach for demand modeling based on data that ...

In this paper, we study a production-inventory systems with finite production capacity and fixed setup costs. The demand process is modeled as a mixture of a compound Poisson process and a constant demand rate. For the backlog model we establish conditions on the holding and backlogging costs such that the average-cost optimal policy is of (s, S)-type. The method of proof is based on the reduct...