Policies utilizing tactical inventory for service-differentiated customers

We consider a manufacturer serving two customer classes where one wants the item immediately and the second receives a discount to accept a delay. We show that a (S, R, B) base stock policy is optimal under differentiation and non-differentiation where S, R, and B are the order-up-to, reserve-up-to, and backlog-up-to amounts. The body of the paper can be found in Duran et al. [3]. The lemmas are summarized below with corresponding proofs. 1 Proof of Lemmas

• Type: Journal
• Year: 2008
• Where: ORL
• Authors: Serhan Duran, Tieming Liu, David Simchi-Levi, Julie L. Swann
• Keywords: Base Stock Policy, Customer Classes, Duran Et Al, ORL 2008