A REORDERING POLICY WITH INSTANTANEOUS EMERGENCY DELIVERY

Abstract : A reordering policy is envisaged in which two types of orders are possible. The first, a regular order, is such that the time to fill the order is a random variable. The second, an emergency order, is such that, effectively, the time to fill the order is zero. The cost of placing an emergency order should, of course, be greater than the cost of placing a regular order and under the circumstances an expression for per unit time cost is derived which when minimized will yield the optimal reorder policy. (Author)