Abstract
Current research efforts on inventory management mainly focus on operational decisions and inventory control, i.e., characterizing replenishment policies based on inventory level over a planning horizon. There is an extensive literature on inventory control in both deterministic and stochastic environments, see e.g., Axsäter (2000), Zipkin (2000), Nahmias (2001), Porteus (2002), and Cheng et al. (2010). Most of them ignore financial status of a firm and assume that the firm is able to obtain infinite capital to implement any operational decisions.
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