Communications for Statistical Applications and Methods

The Korean Statistical Society (한국통계학회)
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Optimal Restocking Policy of an Inventory with Constant Demand

  • Ki, Jeong Jin (Department of Statistics, Sookmyung Women’s University) ;
  • Lim, Kyung Eun (Department of Statistics, Sookmyung Women’s University) ;
  • Lee, EuiYong (Department of Statistics, Sookmyung Women’s University)
  • Published : 2004.12.01
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Abstract

In this paper, a model for an inventory whose stock decreases with time is considered. When a deliveryman arrives, if the level of the inventory exceeds a threshold $\alpha$, no stock is delivered, otherwise a delivery is made. It is assumed that the size of a delivery is a random variable Y which is exponentially distributed. After assigning various costs to the model, we calculate the long-run average cost and show that there exist unique value of arrival rate of deliveryman $\alpha$, unique value of threshold $\alpha$ and unique value of average delivery m which minimize the long-run average cost.

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References

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