Loading...

An efficient procedure for computing an optimal (R, Q) policy in continuous review systems with poisson demands and constant lead time

Yazdan Shenas, N ; Sharif University of Technology

494 Viewed
  1. Type of Document: Article
  2. Abstract:
  3. In this paper, a continuous review inventory system is considered in which an order in a batch of size Q is placed immediately after the inventory position reaches R. Transportation time is constant and demands are assumed to be generated by a stationary Poisson process with one unit demand at a time. Demands not covered immediately from the inventory are backordered. In a recent paper, the exact evaluation of batch-ordering policies for two-level inventory systems was derived. This evaluation is based on a recursive procedure for determining the exact policy costs in case of one-for-one replenishment policies. In this paper, we show how this result can be applied to find the optimal solution of a (R, Q) policy. To obtain the optimal policy for this system, considering a one-for-one policy, we will first solve the base stock model by setting the inventory position at the supplier to a certain value. By considering ordering cost, we next derive the cost function of the defined (R, Q) model and find the optimal solution for the exact value of the expected system costs using a search method. In demonstrating the applicability of the proposed method, we resort to solving an example
  4. Keywords:
  5. (R,Q) model ; Backordered demand ; Base stock model ; Constant lead time ; Inventory ; Poisson demand ; Base stock ; Continuous review ; Leadtime ; Model constants ; Optimal solution ; Costs ; Inventory control ; Optimal systems ; Optimization ; Poisson distribution ; Poisson equation ; Continuous time systems ; Numerical model ; Poisson ratio ; Policy analysis
  6. Source: Scientia Iranica ; Volume 16, Issue 2 E , 2009 , Pages 128-137 ; 10263098 (ISSN)
  7. URL: http://archive.scientiairanica.com/Issues/00115/2009/v16/n2.aspx