A new perspective on inventory systems

Emö Bazsa-Oldenkamp and P. den Iseger

No EI 2000-13/A, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: In this article a single item inventory model with backlogging is analyzed, which is a generalization of the most well-known simple models. This formulation enables us to separate the analysis of the system to the analysis of the control rule (reduced to the analysis of a Markov chain) and of the time stationary distribution for the arrival process of customers. This facilitates a much better understanding of such systems. A simple sample path argument enables a straightforward derivation of average holding costs, ordering costs, services measures. A recently developed algorithm of Laplace transform inversion technique provides us with an efficient tool for the computation of these cost expressions.

Keywords: Inventory control; Markov chains; Stochastic compound demand processes (search for similar items in EconPapers)
Date: 2000-04-12
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Persistent link: https://EconPapers.repec.org/RePEc:ems:eureir:1646

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