Accession Number:

AD0679701

Title:

BAYES SEQUENTIAL DESIGN OF STOCK LEVELS,

Descriptive Note:

Corporate Author:

GEORGE WASHINGTON UNIV WASHINGTON DC LOGISTICS RESEARCH PROJECT

Personal Author(s):

• Zacks, S.

Report Date:

1968-11-18

Pagination or Media Count:

25.0

Abstract:

Bayesian determination of optimal stock levels is studied for the case of Poisson distribution of the demand variable, and prior gamma distribution of the expected demand. Bayes sequential procedure is derived, assuming that stock level can be adjusted at the beginning of each period so that a shortage can be immediately replenished and an overstock can be corrected. The Bayes sequential procedure is more difficult to obtain if this assumption is removed. A dynamic programming method for obtaining the general Bayes sequential procedure is outlined. Finally, an empiric Bayes estimation procedure of the optimal Bayesian Bayesian stock level is presented. Author

Descriptors:

• (*INVENTORY CONTROL
• OPTIMIZATION)
• DYNAMIC PROGRAMMING
• STATISTICAL DISTRIBUTIONS
• DISTRIBUTION THEORY
• MANAGEMENT PLANNING AND CONTROL
• MATHEMATICAL MODELS
• DECISION THEORY

Subject Categories:

• Logistics, Military Facilities and Supplies
• Statistics and Probability

Distribution Statement:

APPROVED FOR PUBLIC RELEASE