Classic inventory models use average cost functions. It is generally accepted that these models should account for the time value of money. They do so not by considering the timing of cash-flows, but by including opportunity costs. The Net Present Value (NPV) framework has long been used to compare these models with. We formalise NPV Equivalence Analysis (NPVEA) under various payment structures...

When a manufacturer places repeated orders with a supplier to meet changing production requirements, he faces the challenge of finding the right balance between holding costs and the operational costs involved in adjusting the shipment sizes. We consider an inventory whose content fluctuates as a Brownian motion in the absence of control. At any moment, a controller can adjust the inventory lev...

Previous ordering cost reduction vendor–buyer inventory models with backorder price discount usually assumed that the buyer must pay to the vendor for the ordered items as soon as the items are received, the received quantity is same as the ordered quantity and the transportation cost is independent of the shipment lot-size. In practice, however, the vendor is willing to offer the buyer a certa...

abstractin this study, a vendor-managed inventory model is developed for a single-vendor multiple-retailer single-warehouse (sv-mr-sv) supply chain problem based on the economic order quantity in which demands are stochastic and follow a uniform probability distribution. in order to reduce holding costs and to help balanced on-hand inventory cost between the vendor and the retailers, it is assu...

Inventory is lifeblood in an organization. Multiechelon inventory of Olympia paper mill, Khyber Pakhtonkhwa is optimized by efficient management of the organizational supply chain (SC). A supply chain is designed starting from raw material receiving from supplier up to finished good delivered to the customer. The on-going setup of the selected organization is traditional based on the experience...

An order level inventory system for deteriorating items has been developed with demand rate as a ramp type function of time. The finite production rate is proportional to the demand rate and deterioration rate is time proportional. The unit production cost is inversely proportional to the demand rate. The model with no shortage case in inventory is first solved. The inventory shortage is discus...

In this paper, we develop approximations that yield insight into the joint optimization of capacity and inventory, and how the optimal inventory policy varies with capacity investment in a single-product, single-station, make-to-stock manufacturing system in which inventory is managed through a base-stock policy. We allow for a correlated demand stream as we analyze our models in an asymptotic ...

a r t i c l e i n f o Keywords: Lateral transshipments Stochastic demand Wholesaler operations Inventory replenishment This paper develops a set of decision rules to assist wholesalers to decide whether it is more cost effective to transship urgent outstanding retailer orders from other wholesalers, very fast but at a higher purchase cost, or to order from their suppliers. By considering the un...

In multi-location inventory systems, transshipments are often used to improve customer service and reduce cost. Determining optimal transshipment policies for such systems involves a complex optimisation problem that is only tractable for systems with few locations. Consequently simple heuristic transshipment policies are often applied in practice. This paper develops an approximate solution me...