Approximations for operating characteristics in a production-inventory model with variable production rate

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Abstract

This paper deals with production-inventory control models with a variable production rate. The demand process is a compound Poisson process. The production rate is controlled by the well-known (m, M)-policy. Simple and accurate approximations are given for operating characteristics of the system. It turns out that a sequential determination of M - m and m yields a rule that minimizes average costs subject to a service level constraint. Numerical results are given to show the accuracy of the approximations.
Original languageEnglish
Pages (from-to)286-297
JournalEuropean Journal of Operational Research
Volume29
Issue number3
DOIs
Publication statusPublished - 1987

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