PURCHASING RAW MATERIAL IN A FLUCTUATING MARKET.
Abstract
A class of situations is considered where the usual techniques of operations research do not indicate the possibility of reducing to a common unit all the operating characteristics of a system caused by some decision and thus defining a criterion function. A special example of this class is furnished by the management of raw materials inventory in the face of fluctuation prices in the raw material market. Statistically reliable explanatory models of the random behavior of price are constructed, and decision rules are defined as transformation of appropriately chosen state variables. Some functionals of the random outcomes of decisions are computed as functions of the undetermined parameters open in the decision rule. Trade-offs between such functionals or system characteristics are analyzed with a view to obtain a basis for the selection of 'good' values of the parameters. Theoretical results are compared against simulated systems using actual series as inputs. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 1964
- Accession Number
- AD0602975
Entities
People
- Jose Trevino