| Article ID: | iaor200971050 |
| Country: | Germany |
| Volume: | 6 |
| Issue: | 4 |
| Start Page Number: | 399 |
| End Page Number: | 409 |
| Publication Date: | Oct 2009 |
| Journal: | Computational Management Science |
| Authors: | Khoury B N |
| Keywords: | safety stock |
The hedging-point policy for a production-inventory system is investigated under the effect of probabilistic machine breakdowns and repairs assuming general discrete distributions for the repair time and the time to failure. Using a methodology whereby inventory levels can assume only discrete values, an optimal safety stock size that minimizes the total expected cost per unit time is determined.