title   
  

Generalizing the ordering cost and holding-backlog cost rate functions in EOQ-type inventory models

Frenk, Hans and Kaya, Murat and Pourghannad, Behrooz Generalizing the ordering cost and holding-backlog cost rate functions in EOQ-type inventory models. In: Choi, Jason, (ed.) Springer’s OR/MS International Series on EOQ Inventory Problems. Springer, New York, NY. (Submitted)

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Abstract

In this chapter, we discuss generalizations of the ordering, inventory holding and backlog costs in EOQ-type models. We solve nested optimization problems to determine the order-up-to level S and cycle length T values that characterize optimal (S, T ) inventory policies. Using these, we characterize the order quantity, maximum backlog and fill rate in the optimal solution. We also study the sensitivity of these optimal values with respect to model parameters demand rate and opportunity cost rate. We present structural results for certain classes of ordering cost and holding-backlog cost rate functions that yield to a convex optimization problem. More general cost functions require the solution of a global optimization problem. For such cases, using our structural results, we generate lower and upper bounds on the optimal T. We illustrate how these bounds can be used to construct efficient computational algorithms to determine the optimal cycle length.

Item Type:Book Section / Chapter
Subjects:H Social Sciences > HD Industries. Land use. Labor > HD0028 Management. Industrial Management
ID Code:21034
Deposited By:Murat Kaya
Deposited On:28 Nov 2012 10:53
Last Modified:21 Jan 2014 14:36

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