A capacity constrained production-inventory system with stochastic demand and production times |
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Authors: | Sven Axsäter |
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Affiliation: | 1. Department of Industrial Management and Logistics , Lund University , P.O. Box 118, 22100, Lund, Sweden sven.axsater@iml.lth.se |
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Abstract: | This paper considers a simple model of a capacity constrained production-inventory system with Poisson demand. The system is controlled by an S policy. The production time for a unit is modelled as a gamma distributed stochastic variable. Using M/G/1 queuing theory it is very easy to evaluate holding and backorder costs and optimise the ordering policy. The suggested model may be useful when evaluating investments in production. |
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Keywords: | production-inventory management capacity constrained stochastic |
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