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Published in:
2012 | OriginalPaper | Chapter
Optimal (R, nQ) Policies for Serial Inventory Systems with Guaranteed Service
Authors : Peng Li, Haoxun Chen
Published in: Operations Research Proceedings 2011
Publisher: Springer Berlin Heidelberg
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In this paper, serial inventory systems with Poisson external demand and fixed costs at each stock are considered and the guaranteed-service approach (GSA) is used to design their optimal echelon (
R
,
nQ
) inventory policies. The problem is decomposed into two independent sub-problems, batch size decision sub-problem and reorder point decision sub-problem, which are solved optimally by using a dynamic programming algorithm and a branch and bound algorithm, respectively. Numerical experiments on randomly generated instances demonstrate the efficiency of these algorithms.