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Computing the optimal policy for capacitated inventory models. (English) Zbl 0804.90038
The inventory position \(x\) is defined as (stock on hand) \(+\) (stock on order) \(-\) (backorders). A base stock policy with a critical level \(z\) is one in which the inventory position is raised to \(z\) if \(x< z\), and no production is done if \(x\geq z\). The author presents a method to compute the optimal value of \(z\) under the condition that the production capacity in every period is bounded. The main idea of the approach is a connection between the problem described above and the classical dam theory developed by Prabhu in the 60-s.

90B05 Inventory, storage, reservoirs
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