Constrained service reliability under stochastic demand

Boronico [Boronico JS. An investigation into the costs and benefits of reli ability of service. Omega 1998;26(1):99-114] considers the determination of ex ante service reliability in a price-taking, expected-profit-maximizing enterprise that must respect an expected-service-quality constraint in the face of stochastic demand. The constrained service-reliability issue, howev er, is much more complex than his analysis reveals. That complexity comes t o light once one recognizes the additional need to consider the curvature o f the underlying functions and the demands imposed upon that curvature by t he second-order conditions for a constrained maximum. The introduction of u ncertainty into the picture only adds to the issue's complexity and further complicates the problem of drawing unambiguous inferences. (C) 2000 Elsevi er Science Ltd. All rights reserved.