We prove the convexity of the objective function for any continuous demand distribution for a common component inventory problem as considered in Jönsson and Silver (Engineering Costs and Production Economics 16 (1989) 257-267). This result guarantees that a local optimum is the global optimum. It facilitates the determination of optimal stock levels for the components.
All Science Journal Classification (ASJC) codes
- Business, Management and Accounting(all)
- Economics and Econometrics
- Management Science and Operations Research
- Industrial and Manufacturing Engineering