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Multiple depot inventory systems with stock transfer are used by many companies especially when demand is high relative to storage capacity. The key issues in such systems are how many of each item to hold at each depot and what to do if there is a demand for an item at a depot that has none of that item in stock. This study was motivated by the inventory problem faced by a UK car part retailer that groups its depots into pairs. The company's policy for dealing with a demand at a depot that cannot be satisfied from local stock is to either transfer the item from the other depot in the group or to place an emergency order. The object of this paper is to characterise an optimal policy for this problem and to propose a method of calculating the parameters of such a policy.inventory systems, Markov decision models, dynamic programming

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Credit scoring is one of the most successful applications of quantitative analysis in business. This paper shows how using survival-analysis tools from reliability and maintenance modeling allows one to build credit-scoring models that assess aspects of profit as well as default. This survival-analysis approach is also finding favor in credit-risk modeling of bond prices. The paper looks at three extensions of Cox's proportional hazards model applied to personal loan data. A new way of coarse-classifying of characteristics using survival-analysis methods is proposed. Also, a number of diagnostic methods to check adequacy of the model fit are tested for suitability with loan data. Finally, including time-by-characteristic interactions is proposed as a way of possible improvement of the model's predictive power.

New start-up companies, which are considered to be a vital ingredient in a successful economy, have a different objective than established companies: They want to maximise their chance of long-term survival. We examine the implications for their operating decisions of this different criterion by considering an abstraction of the inventory problem faced by a start-up manufacturing company. The problem is modelled under two criteria as a Markov decision process; the characteristics of the optimal policies under the two criteria are compared. It is shown that although the start-up company should be more conservative in its component purchasing strategy than if it were a well-established company, it should not be too conservative. Nor is its strategy monotone in the amount of capital it has available. The models are extended to allow for interest on investment and inflation.Markov Decision Processes, Inventory, Start-up Firms