Periodic Review Probabilistic Multi-Item Inventory System with Zero Lead Time under Constraint and Varying Holding Cost

Abstract

Problem statement: This study treats the probabilistic safety stock n-items inventory system having varying holding cost and zero lead-time subject to linear constraint. Approach: The expected total cost is composed of three components: the average purchase cost; the expected order cost and the expected holding cost. Results: The policy variables for this model are the number of periods N*_r and the optimal maximum inventory level Q*_mr and the minimum expected total cost. Conclusion/Recommendations: We can obtain the optimal values of these policy variables by using the geometric programming approach. A special case is deduced and an illustrative numerical example is added.