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A diffusion inventory model for deteriorating items

This paper is concerned with finding the optimal impulse control schedule for a stochastic inventory model for deteriorating items that minimizes the total expected discounted cost over an infinite horizon. It turns out that the optimal impulse control policy can be found as a solution of a Quasi-Va...

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Bibliographic Details
Published in:Applied mathematics and computation 2003-06, Vol.138 (1), p.21-39
Main Authors: Benkherouf, Lakdere, Boumenir, Amin, Aggoun, Lakhdar
Format: Article
Language:English
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Summary:This paper is concerned with finding the optimal impulse control schedule for a stochastic inventory model for deteriorating items that minimizes the total expected discounted cost over an infinite horizon. It turns out that the optimal impulse control policy can be found as a solution of a Quasi-Variational Inequality (QVI) problem of which details are provided. Further, the problem of finding the optimal impulse control policy that minimizes the total expected costs per unit time is addressed.
ISSN:0096-3003
1873-5649
DOI:10.1016/S0096-3003(02)00097-8