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| Author: | Reyniers, D. J. |
| Title: | Interactive high-low search: the case of lost sales. |
| Journal: | Journal of the Operational Research Society
1989 : AUG, VOL. 40:8, p. 769-780 |
| Index terms: | INVENTORY CONTROL PERISHABLE GOODS MATERIALS HANDLING CUSTOMERS |
| Language: | eng |
| Abstract: | An approach is developed for the problems of lost sales. It is widely recognized in the stock-control literature that stockouts result in future loss of customers. A model is dealt with in which a known fraction of unsatisfied customers is permanently lost after each stockout. Initial demand is assumed to be unknown. The problem consists of finding a supply level strategy minimizing expected costs of over- and underproduction, given deterministic demand. In order to determine optimal adaptive search strategies, some varying assumptions about a priori knowledge of initial demand have to be made. Myopic strategies are discussed, and compared with optimal strategies. |
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