A Production-inventory System in a Stochastic Environment with or without an External Supplier
نویسندگان
چکیده
We consider a production-inventory system where the production and demand follow Poisson processes whose rates are modulated by an external stochastic environment process. We study two such systems: with and without an external supplier, and show an interesting stochastic decomposition relationship between the steady state distribution of inventory levels in these two systems. We consider the optimization problem of the system with an external supplier, and provide a closed form formula similar to the classical EOQ one to compute the optimal order size. Finally we illustrate our results through an application to an integrated warranty inventory management problem.
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