THE RELATIONSHIP BETWEEN DECISION VARIABLES AND PENALTY COST PARAMETER IN (Q, R) INVENTORY MODELS.
Abstract
The paper is concerned with the optimum decision variables found using order quantity, reorder point (Q,R) inventory models. It examines whether the optimum variables (Q* and R*) are necessarily monotonic functions of the backorder cost parameter (or equivalently of the performance objective). For a general class of models it is proved that R* must increase as the performance objective is raised, and an inequality condition is derived which governs how Q* will change. Probability distributions of lead time demand are cited or found for which Q* increases, Q* decreases and Q* is independent of increases in performance objectives or backorder cost parameter. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 01, 1969
- Accession Number
- AD0701003
Entities
People
- Alan J. Kaplan