An inventory model with random replenishment quantities.

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Richard A. Ehrhardt, Professor (Creator)
Larry R. Taube, Associate Professor and Director of Undergraduate Programs (Creator)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: A single-period random demand inventory model is analysed under the assumption that the replenishment quantity is a random function of the amount ordered. The structure of optimal policies is characterized for linear ordering cost functions, both with and without a setup cost. Generalizations of base-stock policies and (s, S) policies are shown to be optimal. Closed form analytic expressions for optimal policies are obtained for the special ease of linear ordering cost and uniformly distributed demand. Optimal policies are compared with two heuristics in a more general demand environment. It is shown that a very simple heuristic policy performs quite well.

Additional Information

Publication
International Journal of Production Research, 25(12), pp. 1795-1803.
Language: English
Date: 1987
Keywords
Inventory, Supply management, Randomness