Planning horizon for production inventory models with production rate dependent on demand and inventory level

DOI10.1155/2013/961258MaRDI QIDQ2375729zbMATH OpenOpenAlexDBLPWikidataFDO

Authors Henry C. J. Chao, Jennifer Lin, Peterson C. Julian

Publication date 14 June 2013

Published in Journal of Applied Mathematics (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.1155/2013/961258

Mathematics Subject Classification ID

Inventory, storage, reservoirs (90B05)

Review text

Summary: This paper discusses why the selection of a finite planning horizon is preferable to an infinite one for a replenishment policy of production inventory models. In a production inventory model, the production rate is dependent on both the demand rate and the inventory level. When there is an exponentially decreasing demand, the application of an infinite planning horizon model is not suitable. The emphasis of this paper is threefold. First, while pointing out questionable results from a previous study, we propose a corrected infinite planning horizon inventory model for the first replenishment cycle. Second, while investigating the optimal solution for the minimization problem, we found that the infinite planning horizon should not be applied when dealing with an exponentially decreasing demand. Third, we developed a new production inventory model under a finite planning horizon for practitioners. Numerical examples are provided to support our findings.

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Cites work

• A demand independent inventory model
• AI 2005: Advances in Artificial Intelligence
• Deterministic inventory models for variable production
• Integrating quality and maintenance decisions in a production-inventory model for deteriorating items
• The production-inventory problem of a product with time varying demand, production and deterioration rates
• The sensitivity of the inventory model with partial backorders.

Cited in

(2)

• Infinite horizon production planning in time-varying systems with convex production and inventory costs
• Ending inventory valuation in multiperiod production scheduling

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