A diffusion inventory model for deteriorating items

摘要

This paper is concerned with finding the optimal impulse control schedule for a stochastic inventory model for deteriorating items that minimizes the total expected discounted cost over an infinite horizon. It turns out that the optimal impulse control policy can be found as a solution of a Quasi-Variational Inequality (QVI) problem of which details are provided. Further, the problem of finding the optimal impulse control policy that minimizes the total expected costs per unit time is addressed.