Excess Stock Removal Problem for a Continuous Review Inventory System



We consider a single item, single location, continuous review inventory system when the demand rate jumps to a lower level at a specific time point in the future. The timing of the shift, the current demand rate and the final demand rate are assumed to be known. The adaptation to the new inventory position is achieved by letting the demand process take away the excess stocks. The main contribution of our work lies in the explicit modeling of prior action for adjusting to the new inventory position dictated by the change in demand rate.
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Wilco van den Heuvel