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This paper presents a case study of applying a Bayesian approach to forecast demand and subsequently determine the appropriate parameter S of an (S-1,S) inventory system for controlling spare parts of electronic equipment. First, the problem and the current policy are described. Then, the basic elements of the Bayesian approach are introduced and the procedure for calculating the appropriate pa...

We consider a manufacturer that must fill stochastic demand. When shortages occur, the manufacturer may choose to meet the unmet demand with overtime production and/or by premium freight shipments. We derive optimal production policies for regular and overtime production and discuss the tradeoffs involved.

The article studies, with the level constraints in short supply, the inventory decision model of the minimum total annual cost of the supply chain which, composed of a single supplier and multiple buyers, involving supplier’s lead time as a decision variable, replacing the cost of shortages with the level in short supply, and has solved the difficult problem in the practice.

A dynamic booking policy for multiple fare classes that share the same seating pool on one leg of an airline flight, when seats are booked in a nested fashion and when lower fare classes book before higher ones, is determined. The dynamic policy of airline booking makes repetitive use of an optimal static policy over the booking period, based on the most recent demand and capacity information. ...

We analyze an infinite horizon, single product, continuous review model in which pricing and inventory decisions are made simultaneously and ordering cost includes a fixed cost. We show that there exists a stationary (s, S) inventory policy maximizing the expected discounted or expected average profit under general conditions. © 2005 Elsevier B.V. All rights reserved.

We consider the periodic review inventory control problem in which the purchasing cost of the product changes, in a Markovian fashion, from one period to the next. After establishing (with and without the non-speculation assumption) that an order upto policy is optimal, we develop an efficient recursive solution procedure to compute the optimal levels. In addition, we propose a measure for the ...

Economic lot size scheduling problem (ELSP) for a multi-product single machine system is a classical problem. This paper considers ELSP with budgetary constraint as an important aspect of such systems. In the real world situations the available funds for investment in inventory is limited. By adopting the common cycle time approach to ELSP, we obtain the optimal common cycle which minimizes the...