Inventory lot‐size policies for the bass diffusion demand models of new durable products

The Bass model and its revised forms have been used for forecasting dynamic demand growth in retail service, industrial technology, consumer durable goods, and others. However, the inventory models currently available do not recognize the Bass diffusion demand pattern. In this paper, we first establish the necessary and sufficient conditions to solve the problem in determining the timing and number of replenishments for the Bass model. We then develop several fundamental theoretical results. Furthermore, a one‐dimensional iterative method is proposed to find the optimal replenishment schedule. Finally, we provide an intuitively accurate estimate for the optimal number of replenishments, which significantly reduces computational complexity in finding the optimal replenishment number.