Non-stationary (s, S) Policy Calculator

This online tool tackles the inventory control challenge in a finite-horizon periodic-review system. It incorporates fixed replenishment setup costs and linear costs for holding and backorders. The tool determines the parameters for the optimal (s, S) inventory control policy. For a given set of parameters, it calculates the re-order and order-up-to levels for each period, aiming to minimize the expected total costs over the planning horizon. Additionally, it displays the resulting control policy.



Parameters:

K: the fixed ordering cost
h: the proportional holding cost
p: the penalty cost
d: the Poisson demand rate in each period

References:

Herbert E. Scarf. Optimality of (s, S) policies in the dynamic inventory problem. In K. J. Arrow, S. Karlin, and P. Suppes, editors, Mathematical Methods in the Social Sciences, pages 196–202. Stanford University Press, Stanford, CA, 1960

Roberto Rossi, Inventory Analytics. Cambridge, UK: Open Book Publishers, 2021

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