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: | Gallego Guillermo, Boyaci Tamer |
Keywords: | stochastic processes |
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.