Abstract
This paper considers an inventory control problem with multiple-period replenishment lead time and nonstationary stochastic demand, and provides an optimal nonstationary (s, S) policy for this problem. Through analyzing the inventory relationship between consecutive periods, a stochastic dynamic programming model is established, then an optimal solution algorithm is developed, and the solution has the nonstationary (s, S) form. By simulation the performances of the proposed policy and current methods are computed, and the effectiveness of this policy is verified. Then this policy is applied to a real cases study, and application results are given.
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