A net present value approach to safety stocks in planned production

Article Abstract:

A study explored the manner in which the optimal policy for a sequence of production quantities ought to be determined when demand is stochastic and the sequence must immediately be decided. There appears to be a considerable benefit in approaching such multi-period, multi-stage or multi-level, production-inventory issues by applying a high degree of analytical content. It was demonstrated that the combined, three-fold use of the Laplace transform works well in solving these problems.

Production Planning & Control, Numerical analysis, Production control

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Inventory trigger control policies developed in terms of control theory

Article Abstract:

General nonlinear trigger rules used in inventory ordering and replenishment were characterized within the framework of control theory. Specifically, it was shown that differential equations involving Heaviside and Dirac impulse functions adequately model inventory order policies that trigger a replenishment when a predefined reorder level is reached by an input signal. Both continuous-review and periodic-review single-product cases were considered.

Control theory

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Stochastic properties of a production-inventory process with planned production using transform methodology

Article Abstract:

The time evolution of inventory and stockouts over time for a single-product, multi-period stochastic production/inventory process was analyzed using the Theory of Residues and Laplace transform theory. To this end, the conditions for optimizing the production process using either the traditional average cost measure or the net present value-based annuity stream principle were derived.

Research, Stochastic processes, Production planning

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