A Single-Item Inventory Model for a Nonstationary Demand Process

@article{Graves1999ASI,
  title={A Single-Item Inventory Model for a Nonstationary Demand Process},
  author={Stephen C. Graves},
  journal={Manufacturing & Service Operations Management},
  year={1999},
  volume={1},
  pages={50-61}
}
In this paper, we consider an adaptive base-stock policy for a single-item inventory system, where the demand process is non-stationary. In particular, the demand process is an integrated moving average process of order (0, 1, 1), for which an exponential-weighted moving average provides the optimal forecast. For the assumed control policy we characterize the inventory random variable and use this to find the safety stock requirements for the system. From this characterization, we see that the… CONTINUE READING
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