(s,S) inventory systems with lost sales and Markov renewal demands (Q917416)

The authors analyze a single-item continuous review (s,S) inventory system, in which unit demands are generated by different types of customers. The types of successive demands form a Markov chain, while the n-th interval time distribution function depends on the types of the (n- 1)th and n-th demands, so that the demand epochs form a Markov renewal process. The lead times are exponential, and demands are lost when the inventory is empty. The authors obtain the transient and limiting inventory level distributions. They use point process theory to obtain the expected reorder and shortage rates, as well as their limiting values. Some special cases are considered, namely instantaneous supply of reorders, and renewal demands. For the latter, the authors study the problem of minimizing the long-run expected cost rate.