Inventory Service-Level Measures: Convexity and Approximation
Management Science · 1986 · Volume 32 · Issue 8
Abstract
We argue that standard approximations for two often-used inventory service-level measures may perform poorly in many situations. Then we confirm the long-standing conjecture that the (relatively) exact formulas for these quantities are convex functions of the relevant control variables. Both results suggest the exact expressions should be seriously considered in practical work.
Keywords
inventory/production, approximations, stochastic models
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