The Dynamic Programming Models for Inventory Control System with Time-varying Demand

Truong Trinh

Business and Economic Research, 2017, vol. 7, issue 1, 128-138

Abstract: The concept of dependent and independent demand is important in inventory planning and replenishment that also requires different inventory control solutions. This paper employs the dynamic programming technique for inventory control system with time-varying demand to propose the replenishment policy in terms of the economic order quantity, number of replenishment, and reorder point where total inventory cost is minimized. The study result indicates that the dynamic programming models outperform the traditional lot sizing models in terms of total inventory cost. Moreover, the paper creates opportunities for extending further researches on dynamic inventory related to capacity constraints and uncertainty conditions of demand, yield, lead time.

Keywords: Dynamic inventory; Lot sizing; Order point system; Material requirement planning; Dynamic programming model; Inventory control system (search for similar items in EconPapers)
Date: 2017
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