Title: A periodic review decision model for an inventory system with two demand types

Authors: The Jin Ai; Ririn Diar Astanti; Huynh Trung Luong

Addresses: Department of Industrial Engineering, Universitas Atma Jaya Yogyakarta, Yogyakarta, 55281, Indonesia ' Department of Industrial Engineering, Universitas Atma Jaya Yogyakarta, Yogyakarta, 55281, Indonesia ' Department of Industrial and System Engineering, Asian Institute of Technology, Pathumthani, 12120, Thailand

Abstract: This paper presents a decision model for finding the best policy in a single item inventory system incorporating two kinds of demand, in which each demand type is modelled as an independent compound Poisson process. Some critical model assumptions are infinite planning horizon, infinite replenishment rate, zero lead time, and shortage backorder. A periodic review inventory model is utilised, in which decision variables of the optimisation problem considered in the model are replenishment period and maximum inventory after replenishment. After the mathematical model is developed, optimal decision variables can be obtained.

Keywords: inventory; periodic review; compound Poisson process; model; optimisation.

DOI: 10.1504/IJMOR.2021.119956

International Journal of Mathematics in Operational Research, 2021 Vol.20 No.3, pp.402 - 417

Received: 05 Apr 2020
Accepted: 13 Aug 2020
Published online: 04 Jan 2022 *

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