Investigating Reservation Policies of Advance Orders in the Presence of Heterogeneous Demand

We consider an inventory system, operated by a base stock policy and serving two customer classes. One customer class, Class 1, does not provide any advance demand information at all, while the other, Class 2, does. In order to reward a customer of Class 2 for providing advance order information, it may be sensible to make reservations for the order in the inventory system, thereby preventing later arriving orders from getting access to the inventory before this particular order. We propose various reservation policies and study their impact on the performance of the inventory system.