Optimal Ordering Decisions for Multiple Substitutable Products with Stochastic Demands

This paper deals with a single period stochastic inventory problem with multiple products some (or all) of which can be substituted if one is out of stock. ‘Given the cross substitution probabilities of these products, the problem is to find the optimal order quantity of each item which will maximize the expected profit per period. Since the objective function representing the one period expected profit is extremely difficult to analyze in the …