Models for multi-item continuous review inventory policies subject to constraints

✍ Scribed by D. A. Schrady; U. C. Choe

• Publisher: John Wiley and Sons
• Year: 1971
• Tongue: English
• Weight: 645 KB
• Volume: 18
• Category: Article
• ISSN: 0894-069X
• DOI: 10.1002/nav.3800180403

✦ Synopsis

Models are formulated for determining continuous review (Q, r) policies for a multiitem inventory subject to constraints. The objective function is the minimization of total time-weighted shortages. The constraints apply to inventory investment and reorder workload. The formulations are thus independent of the normal ordering, holding, and shortage costs. Two models are presented, each representing a convex programming problem.

Lagrangian techniques are employed with the first, simplified model in which only the reorder points are optimized. In the second model both the reorder p o h t s and the reorder quantities are optimized utilizing penalty function methods. An example problem is solved for each model. The final section deals with the implementation of these models in very large inventory systems.