Accession Number : AD0641499

Title :   OPTIMAL POLICIES FOR TWO PRODUCT INVENTORY SYSTEMS, WITH AND WITHOUT SETUP COSTS.

Descriptive Note : Technical rept.,

Corporate Author : CORNELL UNIV ITHACA N Y DEPT OF INDUSTRIAL ENGINEERING AND OPERATIONS RESEARCH

Personal Author(s) : Ignall,Edward J.

Report Date : AUG 1966

Pagination or Media Count : 177

Abstract : For the case of no setup cost, the structure of the transient portion of the optimal N period policy for two product inventory systems is obtained, the recurrent portion having been obtained by Veinott. The function L, the expected holding and shortage cost this period, is assumed to satisfy conditions roughly equivalent to (a) having a unique minimum and (b) being quasiconvex in each dimension with the relative minimum decreasing as the other value increases. The policy is: do not order the overstocked product and order less of the other product than would be ordered if there were no overstocked product. The policy is stationary, depending neither on N nor on the number of periods remaining. For the setup cost case, the optimal N period policy is obtained under strong assumptions on L and the optimal one period policy under (a) and (b). Bounds analogous to those of Veinott and Wagner are obtained. The apparent inappropriateness of K-convexity is discussed. (Author)

Descriptors :   (*OPTIMIZATION, *INVENTORY CONTROL), COSTS, DYNAMIC PROGRAMMING, OPERATIONS RESEARCH

Subject Categories : Administration and Management
      Operations Research

Distribution Statement : APPROVED FOR PUBLIC RELEASE