AbstractThis note points out the omission of a simple but vital constraint in the recent articles on partial backlogging. Also, a simple intuitive interpretation of the "backorder" inequality of [2], [3], and [4] is provided.
AbstractProblems of inventory control for items with extremely low demand (say less than one unit per month average demand) have received relatively little attention in the literature. However, for military supply systems it is well known that an extremely large proportion of the total number of items fall into this category. The problem of designing a control system for these low demand items is therefore one of the most critical inventory management problems faced by the National Military Establishment.In the following, a single echelon, multidepot supply system is studied for low demand items having a stationary Poisson probability distribution for demand. Instantaneous information concerning inventory levels is assumed to be available. Procurement lead time is assumed to be constant as well as the time required for either of two available modes of redistribution. Items are ordered one at a time and decision rules are developed for allocation of new procurement, redistribution of stocks among the depots, and for determining system and depot stockage objectives in order to minimize the expected costs resulting from system and depot stockouts, cost of redistributing stocks among the depots, and costs of transportation from the source. The model is an extension of previous models in that redistribution costs and depot stockout costs are considered in the determination of the stockage objective for the system as a whole. When more than a single unit is on order, the allocation of a unit ready to be delivered is determined by the solution of a dynamic programming problem. When only a single unit is on order (and this is the one ready to be delivered), the optimal allocation procedure is reduced to allocating the unit to the depot which has the greatest probability of using it in a time period T + (1/λ) where T is the procurement lead time and λ the system demand rate for the item.
AbstractIn application of operations research models in the area of logistics, important constraints are typically encountered in the form of limitations on the funds appropriated. A supply system must be operated within whatever budgeted funds are appropriated by Congress. In the present article, various possible types of budget constraints are discussed as well as their impact on certain types of operations research models. The possible misallocations that can result from the setting of specific budgets designated for particular purposes are discussed. The confusion existing in the literature concerning the type of constraints that are actually encountered versus those that are imposed upon the mathematical models is pointed out as well as the typical inconsistency of budget constraints and steady‐state models. The difference between a steady‐state budget and a transition‐phase budget is clarified.
AbstractThis article was published as Appendix 6 in the second edition (1957) of the book entitled "The Theory of Inventory Management," by Thomson M. Whitin, in order to reach an audience which might otherwise not be reached in the field of logistics. The Princeton University Press, who publish this book and who are the copyright owners, have granted permission to reprint the above material in the Naval Research Logistics Quarterly.
AbstractThe following note is concerned with establishing an inventory control policy for items with extremely low demand. In the event that the expected savings in ordering cost that would result from buying in lots is less than the concomitant increase in carrying charges, it is uneconomical to use a lot size formula. In this event, it is appropriate to use a system consisting of placing orders as units are demanded.
AbstractAn inventory control problem, in which inventory may be maintained on raw materials or on work after each stage of a three‐stage process, is solved.