Summary
In the recent years, most industries experience non-stationary
(time-varying) demand with higher frequency because product life cycles
are getting increasingly shorter in response to fast technological
progress and rapid changes in consumer preferences. As such, firms must
employ inventory control policies which can effectively handle
non-stationary demand to match their supply to demand.
This online application is committed to the inventory control problem
in a finite-horizon periodic-review system with fixed replenishment
set-up costs, and linear procurement, holding and backorder costs; and
works out the parameters of the (s, S) inventory control policy
– which is known to be optimal for this system configuration. The
current prototype is limited to planning horizons up to 12 periods, and
assumes normally distributed demands. For a given set of instance parameters,
it computes a re-order and an order-up-to level for each time period minimizing
the expected total costs over the planning horizon, and simulates the resulting
control policy.
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