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Differential importance and comparative statics: An application to inventory management

Authors
Journal
International Journal of Production Economics
0925-5273
Publisher
Elsevier
Publication Date
Volume
111
Issue
1
Identifiers
DOI: 10.1016/j.ijpe.2007.01.008
Keywords
  • Comparative Statics
  • Sensitivity Analysis
  • Inventory Management
  • Importance Measures
  • Economic Order Quantity

Abstract

Abstract In this work, we deal with the problem of establishing which parameters impact an inventory policy the most. A new sensitivity measure ( Γ ) is introduced by relating the differential importance ( D) and the comparative statics (CS) techniques. We discuss the properties of the new indicator, and show that it shares the additivity property. We provide the expression of Γ for optimization models. Numerical results are offered for the sensitivity analysis of a recently introduced inventory management model.

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