Sporadic and Continuous Clearing Policies for a Production/Inventory System Under an M/G Demand Process

A production/inventory system is filled continuously at rate 1 and satisfies demands of i.i.d. random sizes that arrive at Poisson times. For this system we consider two clearing policies. Under sporadic review, clearing takes place after a random time independent of the content process. Under continuous review, the system is cleared as soon as the inventory level reaches some pre-specified threshold. We derive explicit results for the associated expected discounted cost functionals under both types of clearing.