Analysis of an inventory system with advance emand information and supply uncertainty


Thesis Type: Postgraduate

Institution Of The Thesis: Middle East Technical University, Faculty of Engineering, Department of Industrial Engineering, Turkey

Approval Date: 2005

Thesis Language: English

Student: Emel Arıkan

Supervisor: HALDUN SÜRAL

Abstract:

In this study we address a periodic review capacitated inventory system with supply uncertainty where advance demand information is available. A stochastic dynamic programming formulation is applied with the objective of minimizing the expected inventory related costs over a finite horizon. Three different supply processes are assumed. Under the all-or-nothing type supply process and partially available supply process, the structure of optimal policy is proved to be a base stock policy and numerical examples are given to demonstrate the effects of system parameters. Under Binomially distributed supply process it is shown that a simple base stock policy is not optimal.