# Accession Number:

## AD0680933

# Title:

## A PRODUCTION AND INVENTORY CONTROL MODEL FOR A MULTI-COMMODITY SYSTEM WITH PROBABILISTIC DEMAND AND INTERACTING SET-UP COST.

# Descriptive Note:

## Technical rept.,

# Corporate Author:

## FLORIDA UNIV GAINESVILLE DEPT OF INDUSTRIAL AND SYSTEMS ENGINEERING

# Personal Author(s):

# Report Date:

## 1967-11-01

# Pagination or Media Count:

## 37.0

# Abstract:

The characteristics of a multi-product production and inventory system with probabilistic demand and interdependency in the set-up cost are studied over a single period, and optimal ordering policies for inventory replenishment are derived. Three cost elements are assumed to affect the operation of the system a production cost, a holding cost and a penalty cost. The fixed component of the production cost, i.e., the set-up cost, will, in general, depend on whether an individual ordering policy, a partial joint ordering policy or a total joint ordering policy from production is used. In general, for an n-commodity system, one can define the optimal strategies over a policy space in E superscript n. This concept is illustrated for n 2. Thus, depending on the initial stock level of the items either of the four following alternatives is possible a produce the first item only b produce the second item only c produce both items simultaneously d do not produce anything. The general problem is clearly equivalent to a multi-commodity, multi-warehouse system supplied by a single source. Author

# Descriptors:

# Subject Categories:

- Operations Research