A minmax distribution free procedure for the (Q, R) inventory model

Guillermo Gallego

doi:10.1016/0167-6377(92)90063-9

A minmax distribution free procedure for the (Q, R) inventory model

Guillermo Gallego^*

^*Corresponding author for this work

Research output: Contribution to journal › Journal Article › peer-review

78 Citations (Scopus)

Abstract

We are concerned with the continuous review (Q, R) model with backorder costs when only the mean and the variance of the distribution of the lead time demand are known. For each (Q, R) the minmax approach consist of finding the most unfavorable distribution fitting these two moments and then minimizing over (Q, R). The most unfavorable distribution turns out to have positive mass at only two points. This allows a closed form expression for the expected number of backorders per cycle. Given this closed form expression, the optimal (Q, R) pair is easy to find.

Original language	English
Pages (from-to)	55-60
Number of pages	6
Journal	Operations Research Letters
Volume	11
Issue number	1
DOIs	https://doi.org/10.1016/0167-6377(92)90063-9
Publication status	Published - Feb 1992
Externally published	Yes

Keywords

backorders
inventory
lot sizing
minmax

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10.1016/0167-6377(92)90063-9

Cite this

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abstract = "We are concerned with the continuous review (Q, R) model with backorder costs when only the mean and the variance of the distribution of the lead time demand are known. For each (Q, R) the minmax approach consist of finding the most unfavorable distribution fitting these two moments and then minimizing over (Q, R). The most unfavorable distribution turns out to have positive mass at only two points. This allows a closed form expression for the expected number of backorders per cycle. Given this closed form expression, the optimal (Q, R) pair is easy to find.",

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AB - We are concerned with the continuous review (Q, R) model with backorder costs when only the mean and the variance of the distribution of the lead time demand are known. For each (Q, R) the minmax approach consist of finding the most unfavorable distribution fitting these two moments and then minimizing over (Q, R). The most unfavorable distribution turns out to have positive mass at only two points. This allows a closed form expression for the expected number of backorders per cycle. Given this closed form expression, the optimal (Q, R) pair is easy to find.

KW - backorders

KW - inventory

KW - lot sizing

KW - minmax

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A minmax distribution free procedure for the (Q, R) inventory model

Abstract

Keywords

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