TY - JOUR
T1 - Exploring the structural properties of the (D, 0) inventory model
AU - Hayya, Jack C.
AU - Harrison, Terry P.
AU - Chatfield, Dean C.
N1 - Funding Information:
We acknowledge with thanks the support of the Center for Supply Chain Research, Smeal College of Business, Pennsylvania State University. The authors also heartily thank the three referees who laboured in providing us with insightful constructive guidance for improving this paper.
PY - 2009/1
Y1 - 2009/1
N2 - We consider the (D, 0) inventory model, where the demand per unit time, D, is stationary and independently and identically distributed (iid) and the lead time, L, is deterministic. In the case of the re-order point, order quantity (s, Q) system, where the cost function is convex in s and Q, this yields two equations that are solved iteratively to yield the optimal policy. The question that we address here concerns the effect of the variability in lead time demand on the total cost and the policy parameters. Simply stated: given other parameters, such as ordering, holding, and shortage costs, can we write the optimal total cost and the policy parameters as linear or quadratic functions of the standard deviation of demand during lead time?
AB - We consider the (D, 0) inventory model, where the demand per unit time, D, is stationary and independently and identically distributed (iid) and the lead time, L, is deterministic. In the case of the re-order point, order quantity (s, Q) system, where the cost function is convex in s and Q, this yields two equations that are solved iteratively to yield the optimal policy. The question that we address here concerns the effect of the variability in lead time demand on the total cost and the policy parameters. Simply stated: given other parameters, such as ordering, holding, and shortage costs, can we write the optimal total cost and the policy parameters as linear or quadratic functions of the standard deviation of demand during lead time?
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U2 - 10.1080/00207540701749299
DO - 10.1080/00207540701749299
M3 - Article
AN - SCOPUS:70449604831
VL - 47
SP - 2767
EP - 2783
JO - International Journal of Production Research
JF - International Journal of Production Research
SN - 0020-7543
IS - 10
ER -