Volume 51, Number 2, April-June 2017
|Page(s)||359 - 373|
|Published online||16 March 2017|
Convex backorders of a rationing inventory policy with two different demand classes
1 Department of Industrial Engineering, Universidad Técnica Federico Santa María, Avenida España 1680, Valparaíso, Chile
2 Department of Industrial Engineering, Universidad de Chile, República 701, Santiago, Chile
Received: 3 August 2015
Accepted: 23 April 2016
We study the constant critical level policy for fast-moving items of an inventory system facing random demands from two customer classes (high and low priority). We consider a continuous review (Q,r,C) policy with continuously distributed demands. Using the properties of the nondecreasing stationary stochastic demand and the threshold clearing mechanism we formulate a convex cost minimization problem to determine the optimal parameters of the critical level policy, which can be optimally solved through KKT conditions. For instances we tested, computational results show that the critical level policy induce a benefit on average 5.9% and 33.5% against the round-up and separate stock policies respectively.
Mathematics Subject Classification: 90B05
Key words: Inventory system / critical level policy / shortage penalty cost / fast moving items / two demand classes
© EDP Sciences, ROADEF, SMAI 2017
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