Conclusion
In thispaper,weaddressedthestochasticlotsizingproblem
with piecewiselinearconcaveorderingcosts.Thiscoststructureis
common inmanyenvironmentscharacterizedbye.g.quantity
discounts, economiesofscales,anduseofmultiplesuppliers.We
focused onimplementingthe(R; S) policyasanalternativetothe
cost-optimal(s,S) policy.The(R; S) policyprovidesarigidreplen-
ishment schedule,andtherebycompletelyeliminatessetup-
orientednervousness – an importantpracticalissueinsupply
chain coordination.WedevelopedaMIPmodeltocomputethe
parametersofthe(R; S) policythataccountsforpiecewiselinear
ordering costs.Inourcomputationalanalysis,weshowedthatthe
(R; S) policyperformsverywell – providinganoptimalitygap
around1%.Thisshowsthatthesetup-orientedsystemnervous-
ness canbeoffsetforarelativelysmallcostpenaltyunder
piecewiseconcaveorderingcosts.