Inventory Commitment and Prioritized Backlogging Clearance with Alternative Delivery Lead Times

In this chapter, we consider prioritized backlogging clearance . Upon the arrival of a replenishment , the seller clears backlogged short and long lead-time orders according to a certain priority rule. Three priority rules are discussed: first-come first-served , myopic short first-served , and strategic short first-served . We characterize the optimal inventory commitment policies under all three priority rules and then compare their performances to shed light on the suitable conditions to apply these rules.

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