Affordable Access

An inventory control system for products with optional components under service level and budget constraints

  • Law


Modularization and customization have made enterprises face the multi-item inventory problems and the interactions among those items. A powerful, affordable information technology system can make the continuous review inventory policy more convenient, efficient, and effective. In this study, a (Q, r) model is developed to find the optimal lot size and reorder point for a multi-item inventory with interactions between necessary and optional components. In order to accurately approximate costs, the service cost is introduced and defined in proportion to the service level. In addition, the service cost and purchasing cost are taken simultaneously, and are treated as a budget constraint for executives to consider because the firm's strategy could influence the choice of service level. The proposed model is formulated as a nonlinear optimization problem, as the service level is nonlinear. Thus, some known procedures are revised to solve this problem and the results are compared with other models. The results show that the revised procedure performs better than the N-R procedure, leading to important insights about inventory control policy.

There are no comments yet on this publication. Be the first to share your thoughts.


Seen <100 times

More articles like this

An inventory control system for products with opti...

on European Journal of Operationa... Jan 01, 2008

Heuristic method on solving an inventory model for...

on Expert Systems with Applicatio... Jan 01, 2010

The service level in inventory control systems

on Engineering and Process Econom... Jan 01, 1979

Multi-echelon, multi-indenture spare parts invento...

on Reliability Engineering & Syst...
More articles like this..