Optimal Inventory Policies when the Demand Distribution is Not Known

Since its introduction by Arrow, Harris and Marschak 1951], the (s, S) inventory model has been used in a variety of ways. It has been used to characterize the dynamics of inventory adjustment by firms (see the survey by Porteus 1990]), understand the demand for money by different agents, analyze price-setting behavior when there are fixed costs associated with a decision to change prices, and examine the macroeconomic implications of inventory policies