MULTI-ITEM ECONOMIC ORDER QUANTITY MODEL WITH AN INITIAL STOCK OF CONVERTIBLE UNITS

ABSTRACT In this paper we consider a group of end items facing level demand patterns and opportunities for regular purchasing. In addition, there arc a number of units that can be converted into any one of the end items, but at different unit costs of conversion. A constrained optimization model is developed for the problem of how best to allocate the convertible units among the end items. A solution algorithm is presented along with numerical illustrations.