The remainder of this paper is structured as follows.In Section
2, we provide a review of the literature on inventory models with
supply disruptions.In Section 3, we introduce the model,our
approximate cost function,and its optimal solution.We prove
analytical bounds on the approximation error in the cost function
and the optimal solution in Section 4 and additional properties in
Section 5. In Section 6, we discuss sensitivity analysis and power-
of-two policies.Our computational results are detailed in Section
7. Finally,in Section 8, we draw conclusions from our analysis and
suggest future research directions.Proofs of all lemmas,theorems,
etc. are provided in the Appendix.