Multi-item inventory policy under limited storehouse capacity

Suppose the storehouse capacity is given as a strict constraint. In this paper, the inventory policy of multi-items will be investigated under this constraint. Theoretically speaking, the Lagrange method, which is defined through introducing the Lagrange multiplier to this constraint, is straightforward to understand. In this paper, the possibility of staggering ordering time points for items will be considered. Suppose the capacity of the storehouse is small. It can be shown that the present procedure brings much smaller average costs than the Lagrange method.