A Revision of the Power Approximation for Computing (s,S) Policies

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Richard A. Ehrhardt, Professor (Creator)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: A revision of the Power Approximation for computing (s, S) inventory policies is presented. The revision incorporates modifications which (1) ensure homgeneity in the units chosen to measure demand and (2) ensure the proper limiting behavior of S - s when the variance of demand is extremely small. Computational experience shows that the revision has operating characteristics that are typically within a few percent of optimal, which is nearly as accurate as the original Power Approximation.

Additional Information

Publication
MANAGEMENT SCIENCE Vol. 30, No. 5, May 1984
Language: English
Date: 2010
Keywords
Inventory/Production-Approximations, Inventory/Production-Periodic Review Models