Optimal Service Policies under Budgetary Constraints

摘要

In the Navy, and possibly in some of the other defense services, the average annual size of the aggregate inventory administered by one of the supply centers is determined by budgetary rules on the basis of the aggregate demand experienced during the recent past. Similarly, the size of the personnel of such a supply center, and thereby the maximum annual number of replenishment orders which it can handle, is fixed - or at least limited - by its operational budget which is comparatively stable and, in any event, independent of the inventory policies adopted by the center. Under the current rules, the average annual inventory of each stock item in some cogs is likewise prescribed by budgetary rules so that the level of service which can be rendered by a center cannot be controlled by it through an allocation of safety stock among the various stock items under an appropriate policy. The present memorandum is concerned with developing such optimal service policies which could be applied if the latter rules were abandoned and the Navy were only to retain its present budgetary control of average annual aggregate inventories and the size of the operating personnel. (Author)