A Discrete Time Inventory Model with Arbitrary Interval and Quantity Distributions of Demand

Abstract

This paper considers a discrete time inventory model in which the times between successive demands and the sizes of those demands are respectively independent and identically distributed random variables. Costs considered are fixed ordering costs and proportional costs of purchase, holding, and shortage. Three types of replenishment policies are formulated as Markov renewal programs and compared. We give an illustrative example.