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Padmanabhan, G., Vart, P. (1995). ¡°EOQ models for perishable items under stock-dependent selling rate¡±, European Journal of Operational Research, 86, 281-292.

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Article

Inventory Optimization for Combined Stock-depended and Stochastic Demand

1Department of Mechanical & Production Engineering, Ahsanullah University of Science & Technology

2Department of Industrial and Production Engineering, Bangladesh University of Engineering and Technology


American Journal of Industrial Engineering. 2018, Vol. 5 No. 1, 1-11
DOI: 10.12691/ajie-5-1-1
Copyright © 2018 Science and Education Publishing

Cite this paper:
Nasib Al Habib, Shuva Ghosh. Inventory Optimization for Combined Stock-depended and Stochastic Demand. American Journal of Industrial Engineering. 2018; 5(1):1-11. doi: 10.12691/ajie-5-1-1.

Correspondence to: Nasib  Al Habib, Department of Mechanical & Production Engineering, Ahsanullah University of Science & Technology. Email: nasib.mpe@aust.edu

Abstract

This work develops an optimal inventory policy for stock-dependent demand items, taking into account both lead time and lead time demand uncertainties. (Q,R) modeling approach has been implemented to deal with uncertainties of demand and lead time. Unlike previous models, this model combines a deterministic approach with a stochastic approach to formulate a hybrid one. Holding cost per unit per unit time is considered an increasing function of quantity in storage up to reorder point and lead time demand is assumed to be proportional to the span of lead time. Lead time is normally distributed and since demand during lead time is proportional to it, the lead time demand also follows a normal distribution. This is a single objective unconstrained optimization model that aims at minimizing inventory cost where the decision variables are order quantity and reorder point.

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