Optimal Inventory Policy Involving Ordering Cost Reduction, Back-Order Discounts, and Variable Lead Time Demand by Minimax Criterion
نویسندگان
چکیده
This paper allows the backorder rate as a control variable to widen applications of a continuous review inventory model. Moreover, we also consider the backorder rate that is proposed by combining Ouyang and Chuang 2001 or Lee 2005 with Pan and Hsiao 2001 to present a new form. Thus, the backorder rate is dependent on the amount of shortages and backorder price discounts. Besides, we also treat the ordering cost as a decision variable. Hence, we develop an algorithmic procedure to find the optimal inventory policy by minimax criterion. Finally, a numerical example is also given to illustrate the results.
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