Exact Analysis of a Lost Sales Model under Stuttering Poisson Demand
Chen, Jie; Jackson, Peter L.; Muckstadt, John A.
We investigate the (S-1,S) inventory policy under stuttering Poisson demand and generally distributed lead time when the excess demand is lost. We correct results presented in Feeney and Sherbrooke's seminal paper (1966). We also prove that the distribution of ?ordered unit delivery times? becomes increasingly concentrated as the variance-to-mean ratio of demand increases.
lost sales; stuttering poisson process; reversible markov chain