ON THE ORDER CYCLE SYSTEM OF INVENTORY CONTROL.
Technical rept. no. 21,
COLUMBIA UNIV NEW YORK SCHOOL OF ENGINEERING AND APPLIED SCIENCE
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An inventory problem where an order for a variable amount of some commodity is placed at equally spaced intervals of time was considered. More specifically, every N periods an order is placed for an amount which brings the sum of stockon-hand plus on-order up to some level S. The objective was to find values N of N and S of S which minimize steady state expected costs per unit time. The model treats a single item for which there is random demand. Demands in successive periods of unit time are independent with equal means and variances. The usual constraints such as aggregate or individual production requirements, maximum size of inventory, or the recognized obsolescence of the item in the near future were not considered. Further, demands that arrive when there is no positive inventory on-hand are backordered and satisfied, eventually, out of incoming orders. The case when these demands are lost, called the lost sales case, was not treated. Author