Optimal Batch Ordering Over a Finite Planning Horizon

Alsuwainea, Abdullah O.; Benkherouf, Lakdere; Sethi, Suresh

Download This Paper

Open PDF in Browser

Add Paper to My Library

Optimal Batch Ordering Over a Finite Planning Horizon

International Journal of Operational Research, 19(4), 2014, 385-406

21 Pages Posted: 27 Apr 2020

See all articles by Abdullah O. Alsuwainea

Abdullah O. Alsuwainea

Department of Statistics and Operations Research, College of Science, Kuwait University

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Date Written: 2014

Abstract

This paper is concerned with finding an optimal inventory policy for a finite horizon, two-stage inventory model. In this model, products may be manufactured in two stages. The first stage uses raw material from an external supplier and the second stage uses raw material from defective items that were returned and repaired during the first stage. The problem of jointly finding the optimal procurement of raw materials and the production plan is formulated as a mixed-integer, non-linear programming problem. A solution procedure for the problem is proposed. The suggested procedure is based on the work of Benkherouf and Gilding (2009).

Keywords: inventory models; optimal inventory policy; finite horizon models

JEL Classification: C61, M11, M20, C40, C10, D83

Suggested Citation: Suggested Citation

Alsuwainea, Abdullah O. and Benkherouf, Lakdere and Sethi, Suresh, Optimal Batch Ordering Over a Finite Planning Horizon (2014). International Journal of Operational Research, 19(4), 2014, 385-406, Available at SSRN: https://ssrn.com/abstract=3566158