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Base stock policies for production/inventory problems with uncertain capacity levels
Date
1998-02-16
Author
Gullu, R
Metadata
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Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License
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In this paper we consider a single item, stochastic demand production/inventory problem where the maximum amount that can be produced (or ordered) in any given period is assumed to be uncertain. Inventory levels are reviewed periodically. The system operates under a stationary modified base stock policy. The intent of our paper is to present a procedure for computing the optimal base stock level of this policy under expected average cost per period criterion. This procedure would provide guidance as to the appropriate amount of capacity to store in the form of inventory in the face of stochastic demand and uncertain capacity. In achieving this goal, our main contribution is to establish the analogy between the class of base stock production/inventory policies that operate under demand/capacity uncertainty, and the G/G/1 queues and their associated random walks. We also present example derivations for some important capacity distributions. (C) 1998 Elsevier Science B.V.
Subject Keywords
Production
,
Queueing
,
Random capacity
,
Base stock policy
URI
https://hdl.handle.net/11511/63823
Journal
EUROPEAN JOURNAL OF OPERATIONAL RESEARCH
DOI
https://doi.org/10.1016/s0377-2217(97)00037-4
Collections
Department of Industrial Engineering, Article
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R. Gullu, “Base stock policies for production/inventory problems with uncertain capacity levels,”
EUROPEAN JOURNAL OF OPERATIONAL RESEARCH
, pp. 43–51, 1998, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/63823.