PERIODIC REVIEW INVENTORY MODELS WITH CONTROLLABLE LEAD TIME AND LOST SALES RATE REDUCTION
The purpose of this study is to investigate two stochastic periodic review inventory models affected by the lead time and lost sales rate. In our models, we consider that the lead time can be shortened at an extra crashing cost, which depends on the length of lead time. Moreover, we assume that the...
Saved in:
Published in | Journal of the Chinese Institute of Industrial Engineers Vol. 22; no. 5; pp. 355 - 368 |
---|---|
Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
Taylor & Francis Group
01.01.2005
|
Subjects | |
Online Access | Get full text |
Cover
Loading…
Summary: | The purpose of this study is to investigate two stochastic periodic review inventory models affected by the lead time and lost sales rate. In our models, we consider that the lead time can be shortened at an extra crashing cost, which depends on the length of lead time. Moreover, we assume that the lost sales rate can also be reduced by capital investment. The objective of our study is to simultaneously optimize the review period, the lost sales rate and the lead time. We first assume that the protection interval (i.e., review period plus lead time) demand follows a normal distribution. Then, the assumption is relaxed to consider a distribution-free case where only the mean and standard deviation of protected interval demand are known. For each case, an algorithm is developed to find the optimal investment strategy. Finally, two numerical examples are given to illustrate the results. |
---|---|
ISSN: | 1017-0669 2151-7606 |
DOI: | 10.1080/10170660509509305 |