AN AGGREGATE STOCKAGE POLICY FOR EOQ ITEMS AT BASE LEVEL

Abstract

The report describes a mathematical model for determining optimal operating rules for control of an inventory system comprising a large number of Economic Order Quantity (EOQ) items. The model accepts two types of information as inputs: item data, consisting of unit price, past demand, and resupply time; and system data, consisting of future base activity level, variance to mean ratio of demand distribution, and constraints on the average backorder rate and order frequency per year. Based on these inputs, the model computes a reorder point and order quantity for each item in the system. Constraints on the backorder rate and order frequency can be varied within the relevant range of the base operations and the corresponding minimum-cost policies derived. Alternative efficient policies can thus be presented to the base supply manager instead of a single policy and he can choose the one most appropriate for his operating conditions.

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Document Details

Document Type
Technical Report
Publication Date
Jun 01, 1968
Accession Number
AD0671481

Entities

People

  • John Y. Lu
  • Robin B. S. Brooks

Organizations

  • RAND Corporation

Tags

Communities of Interest

  • Ground and Sea Platforms
  • Human Systems
  • Weapons Technologies

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  • Air Force
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  • Computational Science
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  • Databases
  • Frequency
  • Linear Programming
  • Mathematical Models
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  • Simplex Method
  • Simulations
  • Standards
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  • Computational Modeling and Simulation
  • Logistics and Supply Chain Management.