AN ALLOCATION MODEL AND ITS APPLICATION TO A MULTI-ECHELON INVENTORY PROBLEM

摘要

The problem of optimal allocation of stock to two inventory installations is studied under the condition that the sum of the two inventories is less than a fixed level. For the n-period dynamic problem optimal policies are obtained when the ordering cost is linear and the one-period expected holding and shortage costs are convex. Extensions are given to the cases of time lags in delivery of stock and incomplete backlogging of excess demand. The infinite horizon problems are considered for the discount factor a £ I. Finally, applications of this allocation model to multi-echelon and mul+i-product inventory problems are given.