Mubiru, Kizito PaulKariko-Buhwezi, BernardLating, Peter2022-06-112022-06-111998Mubiru, K. P., Kariko-Buhwezi, B., & Lating, P. Optimality of Supermarket Inventory Policies under Stochastic Demand in Uganda: A Case Study of Milk Powder Product. In PROCEEDING OF THE EIGTH OPERATIONS RESEARCH SOCIETY FOR EASTERN AFRICA (ORSEA) INTERNATIONAL CONFERENCE (p. 250).https://nru.uncst.go.ug/handle/123456789/3892Effective inventory management requires cost-effective methods in determining the optimal ordering decisions of cycle inventories in a stochastic demand environment. In this paper, an inventory model with stochastic demand is developed to analyze the ordering decisions of milk powder in supermarkets given a periodic review inventory system under stochastic demand. Adopting a Markov decision process approach, the states of a Markov chain represent possible states of demand for milk powder product. The decision of when to order is made using dynamic programming over a finite period planning horizon. The approach demonstrates the existence of an optimal state-dependent ordering policy as well as the corresponding total inventory costs.enModeling, Optimization, inventory policy, stochastic demandPresentation