A Single-Product Inventory Model for Multiple Demand Classes

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A Single-Product Inventory Model for Multiple Demand Classes

We consider a single-product inventory system that serves multiple demand classes, which differ in their shortage costs or service level requirements. We assume a critical-level control policy, and show the equivalence between this inventory system and a serial inventory system. Based on this equivalence, we develop a model for cost evaluation and optimization, under the assumptions of Poisson ...

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Electronic Companion — “ A Single - Product Inventory Model for Multiple Demand Classes ” by Hasan Arslan , Stephen C . Graves , and

Proposition 1. Consider two stocking policies s1 and s2 where for some j , s2 j = s1 j − 1, s2 j−1 = s1 j−1 + 1, and s2 i = s1 i , ∀ i = j j − 1. We have that: (i) ILi s2 i s 2 N ≥ ILi s1 i s1 N for i ∈ 1 j − 1 , and (ii) ∑j i=1 Bi i s 2 i s 2 N ≥ ∑j i=1 Bi i s 1 i s 1 N . Proof. From (6) and (7) we find that ILj s2 j s 2 N = ILj s1 j − 1 s1 j+1 s1 N = ILj s1 j s1 N − 1. Thus from (8) and (9), ...

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ژورنال

عنوان ژورنال: SSRN Electronic Journal

سال: 2005

ISSN: 1556-5068

DOI: 10.2139/ssrn.725803