DISTRIBUTION-FREE PROCEDURES FOR SOME INVENTORY MODELS

Stochastic inventory models, such as continuous review models and peri odic review models, require information on the lead time demand. Howev er, information about the form of the probability distribution of the lead time demand is often limited in practice. We relax the assumption that the cumulative distribution function, say F, of the lead time de mand is completely known and merely assume that the first two moments of F are known and finte. The minmax distribution free approach for th e inventory model consists of finding the most unfavourable distributi on for each decision variable and then minimizing over the decision va riable. We solve both the continuous review model and the periodic rev iew model with a mixture of backorders and lost sales using the minmax distribution free approach.