ISYE SEMINAR SERIES - A Periodic Review Inventory Model with Three Delivery Modes and Forecast Updates

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This paper is concerned with a periodic review inventory system with three delivery modes (fast, medium and slow) and demand forecast updates. At the beginning of each period, the inventory level and demand information are updated, and decisions on how much to order using each of the three delivery modes are made. Both finite and infinite horizon problems are treated. Objectives considered are those of discounted and average cost minimization. It is shown that in all cases, an optimal ordering policy is a modified state-dependent base-stock policy.


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  • Created By:
    Barbara Christopher
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  • Modified By:
    Fletcher Moore
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