Monotonicity properties of stochastic inventory systems
Coauthor(s): Min Wang.
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The principal performance measures in an inventory system involve key characteristics of
the system's inventory position, i.e., the total inventory the firm is economically committed
to, as well as the average order size or order frequency. As to the former, the focus among
operation managers is on the maximum inventory (position), the average inventory and the
minimum inventory, the latter being related to the so-called safety stock concept. Financial
analysts and macroeconomists pay particular attention to the sales/inventory ratio, also
referred to as the inventory turnover.
Source: Working paper
Federgruen, Awi, and Min Wang. "Monotonicity properties of stochastic inventory systems." Working paper, Michigan Ross School of Business, June 2011.