A One-Time Excess Inventory Disposal Decision Under a Stationary Base-Stock Policy

We consider a stochastic inventory system that has been operated under a policy different from the one that will be implemented in the future. Such a situation may arise as a result of changes in model assumptions leading to the implementation of a different policy. Before the new policy is implemented, there may be some units on hand which may exceed the optimal order-up-to level. Hence, one needs to evaluate a one-time inventory disposal …