Document Type
Discussion Paper
Publication Date
8-1-2000
CFDP Number
1270
CFDP Pages
10
Abstract
Inventory models customarily assume that demand is fully satisfied if sufficient stock is available. We analyze the form of the optimal inventory policy if the inventory manager can choose to meet a fraction of the demand. Under classical conditions we show that the optimal policy is again of the ( S,s ) form. The analysis makes use of a novel property of K-concave functions.
Recommended Citation
Scarf, Herbert E., "Optimal Inventory Policies When Sales Are Discretionary" (2000). Cowles Foundation Discussion Papers. 1521.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1521