Accession Number : AD0665030

Title :   OPTIMAL INVENTORY POLICY WITH MULTIPLE SET-UP COSTS.

Descriptive Note : Technical rept.,

Corporate Author : STANFORD UNIV CALIF DEPT OF OPERATIONS RESEARCH

Personal Author(s) : Lippman,Steven A.

Report Date : 15 JAN 1968

Pagination or Media Count : 109

Abstract : The report describes a deterministic, single product, discrete review, finite time horizon inventory problem, called the multiple set-up cost problem. The holding cost in each period is a nondecreasing (and sometimes concave) function. It is assumed that the order in period i is delivered in trucks with capacity M sub i and that the cost of delivery for each truck is a nondescreasing concave function of the amount delivered by that truck. The existence of an optimal production schedule is established such that for each period (1) there are no partially filled trucks in period i if the inventory entering period i is positive and (2) the inventory at the end of period i is less than M sub i. Exploiting this information, an efficient algorithm is developed. Next, the stationary, infinite horizon version of the multiple set-up cost problem is considered. Finally, a stochastic inventory problem wherein the ordering cost function is merely assumed to be nondecreasing and subadditive is discussed.

Descriptors :   (*INVENTORY CONTROL, OPTIMIZATION), STOCHASTIC PROCESSES, MATHEMATICAL MODELS, MANAGEMENT PLANNING AND CONTROL, DECISION MAKING, INVENTORY CONTROL, PERIODIC VARIATIONS, ECONOMICS, COSTS, ALGORITHMS, SCHEDULING, NAVAL PROCUREMENT, THEOREMS

Subject Categories : Administration and Management
      Operations Research
      Logistics, Military Facilities and Supplies

Distribution Statement : APPROVED FOR PUBLIC RELEASE