This article presents several single-echelon, single-item, static demand inventory models for situations in which, during the stockout period, a fraction b of the demand is backordered and the remaining fraction 1 -b is lost forever. Both deterministic and stochastic demand are considered. although the caae of stochaatic demand is treated heuristically. In each situation, a mathematical model representing the average annual cost of operating the inventory system is developed. and an optimum operating policy derived. At the extremes b=l and b=O the models presented reduce to the usual backorders and lost sales cases, respectively.
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