An investigation of a simple logistic model

The coordination of logistics decisions such as maintenance, replacement, inventory and transportation in a single framework is a very difficult task. This paper is motivated by an observation about the decision making process of a multi-echelon military system. The authors formulate a minimization problem in order to optimize logistics decisions given that static equilibrium environmental and organizational conditions are set. These refer to a deterministic stationary demand, fixed number of machines, exponential probability distribution function of failure and repair, a periodic transportation tour and EOQ inventory policies as well as other characteristics. Furthermore, the problem is reformulated as an unconstrained single variable problem and a procedure to identify its local optimal solutions is suggested. Also, the results of an experimental study consisting of 10000 runs carried out on an IBM PC computer is reported with analytic emphasis on the cost components under different assumptions regarding the data structure. Finally, conclusions are drawn with respect to policy implications of the model.