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A continuous‐review inventory model with constant resupply time and defective items
Author(s) -
Moinzadeh Kamran,
Lee Hau L.
Publication year - 1987
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/1520-6750(198708)34:4<457::aid-nav3220340402>3.0.co;2-o
Subject(s) - constant (computer programming) , procurement , poisson distribution , imperfect , computer science , quality (philosophy) , mathematical optimization , operations research , scheme (mathematics) , mathematics , economics , statistics , mathematical analysis , linguistics , philosophy , management , epistemology , programming language
As a result of imperfect production and inspection by suppliers, pilferage, and/or damage in transit, it is common that procurement orders may contain defective items. This article deals with a continuous‐review inventory system with Poisson demand arrivals and constant resupply time. Items in resupply lots may not be of perfect quality. The operating characteristics of such a system are analyzed. For purposes of computational savings, an approximation scheme for the operating characteristics is presented. As a result of the approximation, the determination of the optimal ordering policy becomes much simpler. Extensive numerical tests suggest that the approximation scheme is very effective in giving the optimal or near‐optimal ordering policies for such a system.