Browsing by Subject "Lot size-reorder point policy"

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Open Access
Analysis of the (Q, r) inventory model for perishables with positive lead times and lost sales
(Institute for Operations Research and the Management Sciences (INFORMS), 2008) Berk, E.; Gürler, Ü.
We consider a perishable inventory system with Poisson demands, fixed shelf lives, constant lead times, and lost sales in the presence of nonnegligible fixed ordering costs. The inventory control policy employed is the continuous-review (Q, r) policy, where r < Q. The system is modeled using an embedded Markov process approach by introducing the concept of the effective shelf life of a batch in use. Using the stationary distribution of the effective shelf life, we obtain the expressions for the operating characteristics and construct the expected cost rate function for the inventory system. Our numerical study indicates that the determination of the policy parameters exactly as modeled herein results in significant improvements in cost rates with respect to a previously proposed heuristic. We also compare the (Q, r) policy with respect to a time-based benchmark policy and find that the (Q, r) policy might be impractical for rare events, but overall appears to be a good heuristic policy.
Open Access
On the (Q,r) policy for perishables with positive lead times and multiple outstanding orders
(Springer New York LLC, 2020-01) Berk, Emre; Gürler, Ülkü; Poormoaied, Saeed
We consider an inventory system for perishables with fixed lifetimes, positive replenishment lead times and lost sales in the presence of non-negligible fixed ordering costs. The system is studied under the lotsize reorder level (Q, r) policy. An exact analysis of this system based on the stationary distribution of the remaining lifetime process is provided by Berk and Gürler (Oper Res 56(5):1238-1246, 2008) under the restriction that there is at most one outstanding order at any time (r< Q). In this work, we generalize their results to allow for more than one outstanding orders (r≥ Q). We provide the operating characteristics of the inventory system and construct the exact expected cost rate expression using a renewal theoretic approach. An illustrative numerical study indicates that allowing for multiple outstanding orders (r≥ Q) may result in significant savings in the expected cost rate, compared to the case with r< Q. In particular, when the fixed lifetimes are short and the ordering costs are low, expected costs can be reduced by more than half.