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Necessary and sufficient conditions for a zero-inventory policy to be optimal in an unreliable manufacturing system

Though it may be argued that inventories are a buffer against uncertainty, and that therefore one should strive to maintain a positive inventory whenever there is any uncertainty, we show that there are ranges of values for mean time between failures and mean repair times for which zero-inventory policies are exactly optimal. This provable optimality is initially surprising since it runs counter to the argument made above; instead it reinforces the case for zeroinventory policies which is currently made on the grounds that it enforces a healthy discipline on the entire manufacturing process.