Multi-Item Planned Procurement and Spot Buy Procedures.
CONTROL ANALYSIS CORP PALO ALTO CALIF
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A budget is available for purchasing certain items over a finite time horizon. A portion of this budget is spent on initial procurements, and then the remainder of the budget is set aside for so called spot buys. A spot buy occurs whenever the initial procurement for each item is exhausted and there is unmet demand. As spot buy purchases are usually accompanied by higher unit costs, there is an incentive to minimize there purchases by having sufficient initial procurements. On the other hand, if large initial procurements on all items are made, there may occur an imbalance situation at the end of the horizon in which there is excess stock in some items, shortages in other items, and no funds remaining in the budget. The report develops procedures for optimally determining the trade-off between initial purchases and spot buys. Author
- Administration and Management
- Operations Research