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A novel modeling approach for a capacitated (S,t) inventory system with backlog under stochastic discrete demand and lead time
Author(s)
Tai, Pham Duc
Huyen, Pham Phuong Ngoc
Buddhakulsomsiri, Jirachai
Date Issued
January 1, 2021
Type
Article
Abstract
In this paper, a new period-based approach is proposed for modeling a capacitated inventory system, operating under an (S,T) policy with backlog. The system experiences stochastic discrete demand and lead time. By using the proposed method, a mathematical model is developed. The model can accurately estimate the inventory system measures of performance: the expected inventory on-hands and over-storage amount. Through a simulation experiment, the new model is compared with two other models, which are developed by using a widely used mean-based approach. The comparison is conducted based on a case study data set. The results demonstrate that the period-based model is superior to the mean-based models with respect to capturing the behaviors of the inventory system. Therefore, better inventory policy parameters can be obtained by employing the new model.
Citation
International Journal of Industrial Engineering Computations, 12(1), 1-14, 2021