Minimizing holding and ordering costs subject to a bound on backorders is as easy as solving a single backorder cost model

Minimizing holding and ordering costs subject to a bound on backorders is as easy as solving a single backorder cost model

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Article ID: iaor20022669
Country: Netherlands
Volume: 29
Issue: 4
Start Page Number: 187
End Page Number: 192
Publication Date: Nov 2001
Journal: Operations Research Letters
Authors: ,
Keywords: stochastic processes
Abstract:

Minimizing average ordering and holding cost subject to a constraint on expected backorders has required to iteratively solve the backorder cost model with different backorder penalty rates until the constraint is satisfied. Here we present a direct approach, that is as simple as solving a single backorder cost model.

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