Published online by Cambridge University Press: 14 July 2016
For given functions, g(x), h(x), F(x) and a constant, a, f(x) is said to be a solution of the optimal inventory equation if
where f(y - z) = f(0) when z > y. (The same convention holds in similar equations below.) A method of deriving a solution to (1) is to define inductively a sequence of approximating functions, fn(x), by: