Optimal Restocking Policy of an Inventory with Constant Demand

Title & Authors
Optimal Restocking Policy of an Inventory with Constant Demand
Ki, Jeong Jin; Lim, Kyung Eun; Lee, EuiYong;

Abstract
In this paper, a model for an inventory whose stock decreases with time is considered. When a deliveryman arrives, if the level of the inventory exceeds a threshold $\small{\alpha}$, no stock is delivered, otherwise a delivery is made. It is assumed that the size of a delivery is a random variable Y which is exponentially distributed. After assigning various costs to the model, we calculate the long-run average cost and show that there exist unique value of arrival rate of deliveryman $\small{\alpha}$, unique value of threshold $\small{\alpha}$ and unique value of average delivery m which minimize the long-run average cost.
Keywords
inventory;Poisson process;long-run average cost;restocking policy;
Language
Korean
Cited by
References
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