Accession Number : AD0701003

Title :   THE RELATIONSHIP BETWEEN DECISION VARIABLES AND PENALTY COST PARAMETER IN (Q, R) INVENTORY MODELS.

Descriptive Note : Technical rept.,

Corporate Author : ARMY LOGISTICS MANAGEMENT CENTER FORT LEE VA

Personal Author(s) : Kaplan,Alan J.

Report Date : NOV 1969

Pagination or Media Count : 16

Abstract : The paper is concerned with the optimum decision variables found using order quantity, reorder point (Q,R) inventory models. It examines whether the optimum variables (Q* and R*) are necessarily monotonic functions of the backorder cost parameter (or equivalently of the performance objective). For a general class of models it is proved that R* must increase as the performance objective is raised, and an inequality condition is derived which governs how Q* will change. Probability distributions of lead time demand are cited or found for which Q* increases, Q* decreases and Q* is independent of increases in performance objectives or backorder cost parameter. (Author)

Descriptors :   (*INVENTORY CONTROL, MATHEMATICAL MODELS), STATISTICAL DISTRIBUTIONS, DECISION THEORY, THEOREMS

Subject Categories : Operations Research

Distribution Statement : APPROVED FOR PUBLIC RELEASE