Proposals to substantially reduce or eliminate the state income tax and replace the lost revenue through a higher sales tax rate, an expanded sales tax base, or some combination of the two, are being considered in a dozen states, specifically Georgia, Hawaii, Idaho, Kansas, Louisiana, Missouri, Nebraska, New Jersey, Ohio, Oklahoma, Oregon and South Carolina (Hamilton 2012). While no state has f...

We study stochastic inventory planning systems with lost sales and censored demand under stationary and non-stationary settings. Contrary to classical inventory theory, we assume that no knowledge of demand is initially available, and lost sales in each period are unobservable. We take a non-parametric approach and propose adaptive inventory policies that generate a sequence of ordering decisio...

We consider a periodic-review single-location single-product inventory system with lost sales and positive replenishment lead times. It is well known that the optimal policy does not possess a simple structure. Motivated by recent results showing that base-stock policies perform well in these systems, we study the problem of finding the best base-stock policy in such a system. In contrast to th...

In this paper we present a canonical setting that illustrates the need for explicitly modeling interactions between manufacturing and marketing/sales decisions in a firm. We consider a firm that sells an innovative product with a given market potential. The firm may not be able to meet demand due to capacity constraints. For such firms, we present a new model of demand, modified from the origin...

We consider periodic review inventory control problems in directed networks, primary examples of which are distribution systems and assembly systems. External demand could occur at each node. When inventory is insufficient to meet requirements at a node, a portion of this demand is backordered and the remaining is lost. External demands, as well as lead times for inventory purchase, assembly, a...

This paper addresses the problem of determining the sale price and the production quantity under supply uncertainty. The problem is commonly observed in the agricultural industry. We consider a firm that initially leases farm space in order to grow fruit. The realized amount of fruit supply fluctuates due to weather conditions, diseases, etc. At the end of the growing season, the firm makes two...

This note studies the optimal dynamic decision-making problem for a retailer in a price-sensitive, multiplicative demand framework. Our model incorporates lost sales, holding cost, fixed and variable procurement costs, as well as salvage value. We characterize the structure of the retailer’s (discounted) expected profit-maximizing dynamic inventory policy for both finite and infinite selling ho...

We derive approximations for the service levels of two-echelon inventory systems with lost sales and Poisson demand. Our method is simple and accurate for a very broad range of problem instances, including cases with both high and low service levels. In contrast, existing methods only perform well for limited problem settings, or under restrictive assumptions.

We propose an approximation scheme for two important but difficult single-product inventory systems, specifically, the lost-sales system and the perishable product system. The approach is based on quadratic approximations of cost-to-go functions within the framework of Approximate Dynamic Programming via Linear Programming. We propose heuristics and evaluate their performance against existing h...