Inventory models with variable lead time and present value

The figures for inventory make up a huge proportion of a company's working capital. Because of this, we formulated the optimal replenishment policy considering the time value of money to represent opportunity cost. In this article, we provide a mixed inventory model, in which the distribution of lead time demand is normal, to consider the time value. First, the study tries to find the optimal reorder point and order quantity at all lengths of lead time with components crashed to their minimum duration. Secondly, we develop a method to insure the uniqueness of the reorder point to locate the optimal solution. Finally, some numerical examples are given to illustrate our findings.

[1]  David F. Pyke,et al.  Inventory management and production planning and scheduling , 1998 .

[2]  Liang-Yuh Ouyang,et al.  A periodic review inventory model involving variable lead time with a service level constraint , 2000, Int. J. Syst. Sci..

[3]  Mohamed Ben-Daya,et al.  Some stochastic inventory models with deterministic variable lead time , 1999, Eur. J. Oper. Res..

[4]  Ilkyeong Moon,et al.  A note on lead time and distributional assumptions in continuous review inventory models , 1998, Comput. Oper. Res..

[5]  R. J. Tersine.  Principles of inventory and materials management , 1982 .

[6]  Peter Chu,et al.  THE CRITERION FOR THE OPTIMAL SOLUTION OF AN INVENTORY SYSTEM WITH A NEGATIVE EXPONENTIAL CRASHING COST , 1999 .

[7]  Arthur F. Veinott,et al.  Analysis of Inventory Systems , 1963 .

[8]  Frederick S. Hillier,et al.  Introduction of Operations Research , 1967 .

[9]  H. Wee,et al.  Replenishment and pricing policy for deteriorating items taking into account the time-value of money , 2001 .

[10]  Abdul Raouf,et al.  Inventory Models Involving Lead Time as a Decision Variable , 1994 .

[11]  A. Goswami,et al.  An EOQ Model for Deteriorating Items with Linear Time-dependent Demand Rate and Shortages under Inflation and Time Discounting , 1995 .

[12]  L. Ouyang,et al.  Mixture Inventory Model with Backorders and Lost Sales for Variable Lead Time , 1996 .

[13]  G. Gallego,et al.  Distribution Free Procedures for Some Inventory Models , 1994 .

[14]  Jong-Wuu Wu,et al.  Mixture inventory model with back orders and lost sales for variable lead time demand with the mixtures of normal distribution , 2001, Int. J. Syst. Sci..

[15]  M. Hariga.  Effects of inflation and time-value of money on an inventory model with time-dependent demand rate and shortages , 1995 .

[16]  Peter Chu,et al.  A simple method to locate the optimal solution of the inventory model with variable lead time , 1999, Comput. Oper. Res..

[17]  Maurice Queyranne,et al.  Production and Inventory Model Using Net Present Value , 2002, Oper. Res..

[18]  Yu-Cheng Hsiao,et al.  Inventory models with back-order discounts and variable lead time , 2001, Int. J. Syst. Sci..

[19]  S. Aggarwal,et al.  Credit financing in economic ordering policies of deteriorating items , 1994 .

[20]  Ram Rachamadugu.  Error bounds for EOQ , 1988 .

[21]  Peter Chu,et al.  The production and inventory systems taking account of time value , 1998 .

[22]  I. Moon,et al.  A NOTE ON EVALUATING INVESTMENTS IN INVENTORY SYSTEMS: A NET PRESENT VALUE FRAMEWORK , 1993 .

[23]  C. Liao,et al.  An Analytical Determination of Lead Time with Normal Demand , 1991 .

[24]  I. Moon,et al.  AN ECONOMIC ORDER QUANTITY MODEL WITH A RANDOM PLANNING HORIZON , 1993 .