Title: The assortment problem with dynamic deterministic demands and stationary stocking-substitution policies

Authors: David W. Pentico

Addresses: A.J. Palumbo School of Business Administration, John F. Donahue Graduate School of Business, Duquesne University, Pittsburgh, PA 15282-0180, USA

Abstract: We consider multi-period one-dimension assortment problems in which demands for all sizes meet the conditions for a dynamic demand economic lot size problem, the same set of sizes are stocked and the same substitution rules are followed in all periods (stationary stocking-substitution policies), and substitution costs have a |scrap| component and, possibly, either unit-dependent or unit-independent fixed costs. We develop the form of an optimal solution for certain assumptions about the nature of the cost functions and for the relationships among demand patterns for the different sizes. Solution algorithms are developed for both segmented and quasi-segmented stocking-substitution policies and computation-reduction results are developed.

Keywords: inventory; dynamic programming; assortment problem; dynamic deterministic demands; stationary stocking-substitution; catalogue problem.

DOI: 10.1504/IJIR.2008.019206

International Journal of Inventory Research, 2008 Vol.1 No.1, pp.20 - 43

Published online: 02 Jul 2008 *

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