Multi-Product Inventory Situations with One Restriction

The problem of maintaining inventories for a number of products when there is a restriction on the maximum inventory investment, or on maximum warehouse space, is considered. A method of adjusting the order intervals of the products, the Equal Order Interval Method, is shown in general often to produce significantly better cost solutions to these problems than the well known Lagrangian Multiplier Method. Examples are given which demonstrate how the Equal Order Interval Method can be applied effectively and efficiently by heuristics.