Inflation and the optimal inventory replenishment schedule within a finite planning horizon
The problem of minimizing the cost of holding an inventory within a finite time planning horizon is studied. Taking inflation into account changes the character of the solution. The optimal schedule can include periods of time span zero. The minimal cost is not a strictly convex function of the number of replenishment periods. The analysis rectifies fallacies in the antecedent literature.
inflation inventory finite time planning horizon optimal schedule demand deterioration