Periodic review lost-sales inventory models with compound Poisson demand and constant leadtimes of any length

Marco Bijvank, SG Johansen

Research output: Contribution to journalArticleAcademicpeer-review

23 Citations (Scopus)

Abstract

In almost all literature on inventory models with lost sales and periodic reviews the lead time is assumed to be either an integer multiple of or less than the review period. In a lot of practical settings such restrictions are not satisfied. We develop new models allowing constant lead times of any length when demand is compound Poisson. Besides an optimal policy, we consider pure and restricted base-stock policies under new lead time and cost circumstances. Based on our numerical results we conclude that the latter policy, which imposes a restriction on the maximum order size, performs almost as well as the optimal policy. We also propose an approximation procedure to determine the base-stock levels for both policies with closed-form expressions.
Original languageEnglish
Pages (from-to)106-114
Number of pages9
JournalEuropean Journal of Operational Research
Volume220
Issue number1
DOIs
Publication statusPublished - 28 Jan 2012

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