Sensitivity analysis of an economic order quantity for dynamic inventory models with discrete demand

Michinori Sakaguchi and Masanori Kodama

International Journal of Manufacturing Technology and Management, 2009, vol. 18, issue 4, 438-452

Abstract: We study a sensitive analysis of probabilistic inventory problems of multi-period in which demand is a discrete random variable. In the typical inventory model with general demand pattern, we presented a method to decide an optimal policy, which enables us to investigate the effect of the variance of purchasing cost, holding cost and shortage cost on the economic ordering quantity in the inventory system of N-period. Moreover, we compare the optimal policies of inventory examples where demand is a binomial or Poisson random variable.

Keywords: probabilistic inventory; dynamic programming; sensitive analysis; economic order quantity; EOQ; dynamic inventory models; discrete demand. (search for similar items in EconPapers)
Date: 2009
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