Technical Note—The EOQ Model under Stochastic Lead Time

Matthew J. Liberatore
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Matthew J. Liberatore: FMC Corporation, Princeton, New Jersey

Operations Research, 1979, vol. 27, issue 2, 391-396

Abstract: We consider a continuous deterministic-demand, stochastic lead-time inventory model such that the individual unit demands are non-interchangeable. We derive equations that define the optimal values of the two decision variables: order size and timing. This model is shown to be a stochastic lead-time generalization of the EOQ model with backlogging of demand. An illustrative example is presented. Finally, a lower bound, which is independent of the order size, is developed for the optimal ordering time.

Date: 1979
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:27:y:1979:i:2:p:391-396

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