Research Reports from the Department of Operations
Document Type
Report
Publication Date
3-1-1966
Abstract
We are concerned with further generalizations of the inventory depletion model where the inventory deteriorates in time as it remains on the shelf. Once put in use, an item from the inventory of n items has a nonnegative field life, L(s), which is a function of the age, s, of the item upon issuance to the field. The objective is to determine the order of issue that maximizes the total field life of the stockpile. Optimal policies of the form LIFO, last in first out, or FIFO, first in first out, are sought. Earlier writers have considered a static model where there are n items of differing ages in the stockpile. In this paper the model is broadened to become a dynamic model where new items are added and batches of items of the same age are allowed. It is shown that in many cases LIFO and FIFO remain optimal. In addition the assumption that L(s) is a known function is dropped and the field life of an item now becomes a nonnegative random variable, X(s). X(s) may take on any one of a countable number of values Li(s) with probability pi. For Li(s) linear it is shown that FIFO is optimal for the dynamic inventory depletion model where batches are allowed.
Keywords
Operations research, Inventory control, Decision making--Mathematical models, Mathematical optimization, Industrial management
Publication Title
Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University
Issue
Technical memorandum no. 48
Rights
This work is in the public domain and may be freely downloaded for personal or academic use
Recommended Citation
Pierskalla, William P., "Optimal Issuing Policies in Inventory Management -- II" (1966). Research Reports from the Department of Operations. 391.
https://commons.case.edu/wsom-ops-reports/391