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Future supply uncertainty in EOQ models
Author(s) -
Parlar Mahmut,
Berkin Defne
Publication year - 1991
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(199102)38:1<107::aid-nav3220380110>3.0.co;2-4
Subject(s) - unavailability , random variable , economic order quantity , interval (graph theory) , economic shortage , holding cost , function (biology) , computer science , duration (music) , order (exchange) , mathematical optimization , variable (mathematics) , operations research , sensitivity (control systems) , mathematics , econometrics , statistics , supply chain , economics , engineering , mathematical analysis , linguistics , literature , evolutionary biology , finance , combinatorics , law , political science , art , philosophy , electronic engineering , government (linguistics) , biology
This article deals with an inventory problem where the supply is available only during an interval of (random) length X . The unavailability of supply lasts for a random duration Y . Using concepts from renewal theory, we construct an objective function (average cost/time) in terms of the order‐quantity decision variable Q . We develop the individual cost components as order, holding, and shortage costs after introducing two important random variables. Due to the complexity of the objective function when X and Y are general random variables, we discuss two special cases and provide numerical examples with sensitivity analysis on the cost and noncost parameters. The article concludes with a discussion of the comparison of the current model with random yield and random lead‐time models. Suggestions for further research are also provided.