An (s, Q) inventory system with two classes of customers

K.P. Sapna Isotupa

International Journal of Operational Research, 2011, vol. 12, issue 1, 1-19

Abstract: In this paper, we study a lost-sales (s, Q) inventory system with two classes of customers – high priority and low priority. We compare two policies for supplying the two types of customers with their requirements. In one policy, both customers are treated alike. In the other policy, when inventory levels are below a threshold level, only the demands from high-priority (HP) customers are met, whereas the low-priority (LP) customers are sent away unsatisfied. Under certain conditions, we note the remarkable fact that for a lost-sales (s, Q) inventory system with two classes of customers, differentiating between customers and hoarding items for the HP customer yield lower costs for the supplier and better service levels for both types of customers.

Keywords: Markov processes; stochastic processes; lost-sales inventory; multiple classes; rationing; cost comparison; high priority customers; low priority customers. (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=41856 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijores:v:12:y:2011:i:1:p:1-19

Access Statistics for this article

More articles in International Journal of Operational Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().