Template-Type: ReDIF-Paper 1.0
Author-Name: Teunter, R.H.
Author-Name-Last: Teunter
Author-Name-First: Ruud
Author-Name: Dekker, R.
Author-Name-Last: Dekker
Author-Name-First: Rommert
Author-Person: pde16
Title: An easy derivation of the order optimality condition for inventory systems with backordering
Abstract: We analyze the classical inventory model with backordering, where the inventory position is controlled by an order level, order quantity policy. The cost for a backorder contains a fixed and a time-proportional component. Demand can be driven by any discrete process. Order lead times may be stochastic and orders are allowed to cross. The optimality condition for the order-level, given some predetermined order quantity, is derived using an easy and insightful marginal cost analysis. It is further shown how this condition can easily be (approximately) rewritten in well-known forms for special cases.
Creation-Date: 2001-11-28
File-URL: https://repub.eur.nl/pub/1712/feweco20011128150258.pdf
File-Format: application/pdf
Series: RePEc:ems:eureir
Number: EI 2001-41
Keywords: backordering, classical inventory model, optimality condition
Handle: RePEc:ems:eureir:1712