A generalized discrete-time order replacement model

A generalized discrete-time order replacement model

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Article ID: iaor2008675
Country: United Kingdom
Volume: 15
Issue: 2
Start Page Number: 125
End Page Number: 138
Publication Date: Apr 2004
Journal: IMA Journal of Management Mathematics (Print)
Authors: , , ,
Keywords: inventory: order policies, optimization
Abstract:

In this article, we consider a discrete-time order replacement problem. More precisely, we treat a generalized model with more complex cost structure than Kaio & Osaki and with two decision variables: allowable inventory time and ordering time. Based on the discrete probabilistic argument, we derive the optimal ordering policy to deliver a spare unit preventively by a regular order, so as to minimize the expected cost per unit time in the steady state. Numerical examples are devoted to carrying out the sensitivity analysis of model parameters on the optimal ordering policy and its associated expected cost value.

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