Article ID: | iaor20033063 |
Country: | Japan |
Volume: | 45 |
Issue: | 2 |
Start Page Number: | 113 |
End Page Number: | 122 |
Publication Date: | Jun 2002 |
Journal: | Journal of the Operations Research Society of Japan |
Authors: | Ouyang Liang-Yuh, Chang Hung-Chi, Chung Bor-Ren |
Keywords: | decision: applications |
The stochastic inventory models analyzed in this paper explore the problem of lead time associated with setup cost reductions for the continuous review and periodic review inventory models. For these two models with a mixture of backorders and lost sales, we respectively assume that their mean and variance of the lead time demand and protection interval (i.e., lead time plus review period) demand are known, but their probability distributions are unknown. We develop a minimax distribution free procedure to find the optimal solution for each case.