Equivalent Formulations of the Stochastic Cash Balance Problem

This paper shows that the widely appearing “marginal cost” formulations of the dynamic, periodic review, stochastic cash balance problem are equivalent to a “total cost” formulation, as long as the holding, shortage cost, and “closing of account” functions are constructed correctly.

• 저널Management Science · 19(3) · 250–253
• 토픽Economic theories and models · Economics and Econometrics
• DOI10.1287/mnsc.19.3.250
• 저자Evan L. Porteus