Decision Rules for Emergency Replenishments in an Inventory System



We consider a new type of decision rules for emergency replenishments in an inventory system. The decisions are based on complete information about the system state. An advantage with our decision rules are their generality. It is possible to handle batch ordering, compound Poisson demand and emergency replenishments that take time. The decision rules have also a performance guarantee in the sense that emergency replenishments will always lead to lower expected costs. The rules can also be used in connection with lateral transhipments.

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