Technical Note---On the Quasiconcavity of Lost-Sales Inventory Models with Fixed Costs

Authors:
Qing Li;Peiwen Yu
Affiliations:
School of Business and Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong;School of Business and Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong
Venue:
Operations Research
Year:
2012

Citing 7
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Abstract

We show that under a set of conditions, both the maximal profit function and the objective function in several lost-sales inventory models with fixed costs are quasiconcave. Not only is the quasiconcavity property useful computationally, it also leads to a sharper characterization of the optimal policies. Neither the proof of the quasiconcavity property itself nor the proof of the optimal policies by using the property requires the machinery of K-concavity or any of its K-related extensions, and hence they are intuitively appealing.