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A limited order capacity stochastic inventory model with a fixed cost for order: The discounted case

A limited order capacity stochastic inventory model with a fixed cost for order: The discounted case Vol.7 No.4 ACTA MATHEMATICAE APPLICATAE SINICA Oct., 1991 A LIMITED ORDER CAPACITY STOCHASTIC INVENTORY MODEL WITH A FIXED COST FOR ORDER" THE DISCOUNTED CASE" HU QIYING ( ~}~-~-~ ) HU SANLI( ~}~.~-..9- ) (NowA-1#est Tdecommmdcx~a'on En@in~ri.# In.irate, 6~'m,, Xi%n ) I. Model and Assumptions This paper considers a single-item, periodic-review inventory model with linear order costs, a convex function representing expected one-period costs, nonegative i.i.d, demands and a fixed cost for order. Stockouts are backordered. All data are stationary. Both finite and infinite horizon problems are treated. Ref. [1] proves that a modified base-stock policy is optimal for the inventory model with no fixed cost for order. Here, our goal is to prove that a modified (s, S) policy is optimM, where a modified (s,S) policy is: when the initial stock is below s, order enough to bring total stock up to S, or as close to it as possible; otherwise, do not order. Now, we give the notations used in this paper. D---a nonegative r.v., presenting one period demand. 5(> 0)---the limited on order size. u(0 _< u _< oo)---the inventory capacity. ¢(> 0)--denoting per-unit order cost. K(> 0)---the fixed cost for order, zt---inventory at the beginning of http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Acta Mathematicae Applicatae Sinica Springer Journals

A limited order capacity stochastic inventory model with a fixed cost for order: The discounted case

Acta Mathematicae Applicatae Sinica , Volume 7 (4) – Jul 14, 2005

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Publisher
Springer Journals
Copyright
Copyright © 1991 by Science Press, Beijing, China and Allerton Press, Inc., New York, U.S.A.
Subject
Mathematics; Applications of Mathematics; Math Applications in Computer Science; Theoretical, Mathematical and Computational Physics
ISSN
0168-9673
eISSN
1618-3932
DOI
10.1007/BF02009688
Publisher site
See Article on Publisher Site

Abstract

Vol.7 No.4 ACTA MATHEMATICAE APPLICATAE SINICA Oct., 1991 A LIMITED ORDER CAPACITY STOCHASTIC INVENTORY MODEL WITH A FIXED COST FOR ORDER" THE DISCOUNTED CASE" HU QIYING ( ~}~-~-~ ) HU SANLI( ~}~.~-..9- ) (NowA-1#est Tdecommmdcx~a'on En@in~ri.# In.irate, 6~'m,, Xi%n ) I. Model and Assumptions This paper considers a single-item, periodic-review inventory model with linear order costs, a convex function representing expected one-period costs, nonegative i.i.d, demands and a fixed cost for order. Stockouts are backordered. All data are stationary. Both finite and infinite horizon problems are treated. Ref. [1] proves that a modified base-stock policy is optimal for the inventory model with no fixed cost for order. Here, our goal is to prove that a modified (s, S) policy is optimM, where a modified (s,S) policy is: when the initial stock is below s, order enough to bring total stock up to S, or as close to it as possible; otherwise, do not order. Now, we give the notations used in this paper. D---a nonegative r.v., presenting one period demand. 5(> 0)---the limited on order size. u(0 _< u _< oo)---the inventory capacity. ¢(> 0)--denoting per-unit order cost. K(> 0)---the fixed cost for order, zt---inventory at the beginning of

Journal

Acta Mathematicae Applicatae SinicaSpringer Journals

Published: Jul 14, 2005

References