Myopic inventory policies using individual customer arrival information

Abstract

We investigate optimality of myopic policies using the single-unit decomposition approach in inventory management. We derive, under certain conditions, closed-form replenishment decisions, which we call a base-probability policy. That is, the order associated with a given customer is placed if and only if its arrival probability within the lead-time is higher than a threshold.inventory management; base-stock policies; myopic policies;