Optimal inventory control with cyclic fixed order costs

We consider a periodic review single-item inventory model under stochastic demand. Every m periods, in the regular order period, fixed costs are K. In periods in-between, intraperiods, higher of L > K $L>K$ apply. The literature on optimal policies does not account for these time-dependent costs. By generalizing existing proofs policies, we close this gap theory. policy is complex period and period-dependent ( s , S ) $(s,S)$ optimal. describe prove based notion K-convexity ordering behavior presence non–K-convex cost functions. numerical study, find that major driver forward-buying effect shifts probability from intraperiods to period. differences between pure are, however, small.