Approximated closed-form minimum-cost solutions to the (S − 1, S) policy with complete backordering Online publication date: Mon, 30-Nov-2015
by Marcello Braglia; Davide Castellano; Marco Frosolini
International Journal of Mathematics in Operational Research (IJMOR), Vol. 8, No. 1, 2016
Abstract: In this paper, we consider the continuous review (S − 1, S) policy with complete backordering, deterministic and constant lead-time, and with a Poissonian lead-time demand. Moreover, we take into account two different expressions of the total expected cost depending on the customer-service criterion adopted. First, we approximate the Poissonian lead-time demand with a well-suited Gaussian random variable. Although this system can be easily solved with a simple algorithmic approach, it is interesting to be aware of the direct analytical functional relationship between the optimal value of the decision variable and the parameters of the model. Hence, the second step consists in providing some approximated closed-form minimum-cost solutions for both cost models considered under a Gaussian lead-time demand. An extensive numerical study is finally shown to characterise the precision achieved by the approximations developed.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Mathematics in Operational Research (IJMOR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook