SUNConferences, Southern African Institute of Industrial Engineering 2013

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Optimizing Inventory Ordering Policies with Random Lead Times
Blaise Benga Bolan Ebouele, Thomas Bobga Tengen

Last modified: 2013-06-28


One area of focus by inventory managers is the ability to cope with random fluctuations in lead times. These random lead times may be caused by many factors such as run-time or operation time, set-up time, waiting time, customers’ demands, machines down-time , handling time and lot size inspection time which may all be random. The present paper concentrates on the impacts of maintenance operations and fluctuation in demand volume on the random lead times that in turn affect the optimal inventory level. The paper proposes stochastic models for periodic (R, S) and continuous (r, q) inventory levels depending on total lead time. Results reveal that increase in machine breakdown time brings about a reduction in depletion rate and increase in demand increases the depletion rate. An increase in depletion rate is revealed by the fact that time evolution of the inventory level lies above that of a deterministic system. Thus the optimal inventory level can only be determined by following the plot derived from the model

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