AN ECONOMICAL RESETTING MODEL IN CONTINUOUS-REVIEW

This paper is concerned with a resetting model, where the states of th e underlying dynamic system are to be kept inside a tolerance region a round a standard level. Under some assumptions on the dynamic behaviou r, the tolerance region and different costs, an expression for expecte d average cost is derived. The approach is applied to a two-product in ventory system, and for a simple class of policies optimal parameters are computed.