Herbert Scarf
Herbert Scarf was an American mathematician and Yale economist who proved in 1959 and 1960 that (s,S) policies, reorder up to S when stock falls to s, are optimal under fixed ordering costs.
What they did and why it matters
Scarf proved why the simple min-max rule many warehouses use to reorder stock is the right structure when each order carries a fixed cost. An (s,S) policy places an order whenever inventory falls to the reorder level s and orders enough to bring it back up to S. His proof gave a firm theoretical basis to min-max replenishment in ERP and inventory software. With Andrew Clark he also analyzed multi-echelon inventory, the question of how much to hold at a central warehouse versus forward locations, which applies directly to multi-node fulfillment networks.
Related people
Sources
- Herbert E. Scarf brief biography (INFORMS) informs.org
- In memoriam: Herbert Scarf (Yale News) news.yale.edu