OPTIMAL INVENTORY OPERATING POLICIES UNDER RELAXED DELIVERY ASSUMPTIONS.
NAVAL POSTGRADUATE SCHOOL MONTEREY CA
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Historically, the inventory control problem has been analyzed under the assumption that the exact quantity ordered was delivered in one lot, at the end of a probabilistic or deterministic lead time, or, alternatively, that receipts are the direct result of a continuous, fixed rate production process. In this paper, the effect of relaxation of these assumptions is considered. It is quite common in large inventory systems to have the total quantity ordered delivered in increments phased over time. Contracts providing for delivery of short or excess quantities within tolerances are also frequently encountered. Production rates may be stochastic due to work stoppages, the diversion of resources to meet higher priority requirements and other external factors. A family of models, with a variety of delivery conditions, are presented. The optimal operating policies and costs of these models are compared to the policies and costs resulting from models with conventional delivery assumptions. Author
- Logistics, Military Facilities and Supplies