Choosing the Optimum Lot Size for a Reordering Policy with Instantaneous Emergency Deliveries

Article

Bradley, E.L. Jr.; Saw, J.G.   (1972, ASQC and the American Statistical Association)   University of Florida, Gainesville, FL*

Technometrics    Vol. 14    No. 4
QICID: 8410    November 1972    pp. 931-934
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Article Abstract

Research supported by project THEMIS ARO-D Contract DAH C04 68C 002.* - E.L. Bradley Jr. is now with the Department of Biostatistics, University of Alabama in BirminghamA recording policy, to maintain the level of stock in an inventory, is given which allows for two types of orders: regular orders which are filled in strict rotation with the time to fill an order exponentially distributed, or an emergency order which, it is supposed, is filled instantaneously (or effectively so). The optimum lot size of an order is that which minimizes the average operating cost per unit time over an infinite time span. The solution is given for the case in which the items in storage are subject to Poisson demand and the costs of maintaining the stock level are linear functions of the lot size of an order.

Keywords

Statistics,Lot size,Policy deployment


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