Optimal issuing policies under stochastic field lives

Abstract

We consider a stockpile in which each item has a stochastic field life with known distribution, this distribution changing in time in a known deterministic fashion. The problem is to order the items for issuance to the field with the objective of maximizing the total field life. Under monotone likelihood ratio assumptions on the field life distributions, and convexity and concavity assumptions on the change in time of the distributions, we show that LIFO and FIFO policies possess a strong optimality property.