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- Title
A STOCHASTIC INVENTORY MODEL FOR RENTED EQUIPMENT.
- Authors
Whisler, William D.
- Abstract
An inventory of rented equipment is studied. Equipment is withdrawn from the inventory by customers who use it for a length of time and then return it. Decisions about the amount of equipment to rent can be made at certain points in time. This paper describes a policy for making these decisions which minimizes expected costs. The dynamic programming model formulated is different than the usual ones considered in the literature because the inventory level can fluctuate up or down and convexity of the cost function is not important since simple optimal policies can be found when the cost function is nonconvex.
- Subjects
LEASE &; rental services; STOCHASTIC processes; INVENTORY control; PROBABILITY theory; DYNAMIC programming; NONCONVEX programming; INVENTORY accounting; STOCHASTIC models; MATHEMATICAL models of decision making; COST control; COMMERCIAL products; INVENTORY management systems
- Publication
Management Science, 1967, Vol 13, Issue 9, p640
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.13.9.640