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Batch quantities when forecasts are improving

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  • Axsäter, Sven

Abstract

This paper considers the choice of initial batch quantities when demand forecasts are improving. We assume that the standard deviation of the demand per period is decreasing exponentially and approaching a long-run value. A discrete time stochastic single-level inventory model is considered. There are traditional holding and backorder costs as well as an ordering cost. The ordering periods must be determined in advance, and we wish to determine a suitable schedule.

Suggested Citation

  • Axsäter, Sven, 2011. "Batch quantities when forecasts are improving," International Journal of Production Economics, Elsevier, vol. 133(1), pages 212-215, September.
    • Handle: RePEc:eee:proeco:v:133:y:2011:i:1:p:212-215
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    References listed on IDEAS

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    1. Dimitris Bertsimas & Aurélie Thiele, 2006. "A Robust Optimization Approach to Inventory Theory," Operations Research, INFORMS, vol. 54(1), pages 150-168, February.
    2. Ding, Huiping & Grubbstrom, Robert W., 1991. "On the optimization of initial order quantities," International Journal of Production Economics, Elsevier, vol. 23(1-3), pages 79-88, October.
    3. Grubbstrom, Robert W. & Ding, Huiping, 1993. "Initial order quantities in a multistage production system with backlogging," International Journal of Production Economics, Elsevier, vol. 30(1), pages 153-166, July.
    4. Jing-Sheng Song & Paul Zipkin, 1993. "Inventory Control in a Fluctuating Demand Environment," Operations Research, INFORMS, vol. 41(2), pages 351-370, April.
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    Cited by:

    1. Lee, Shine-Der & Lan, Shu-Chuan, 2013. "Production lot sizing with a secondary outsourcing facility," International Journal of Production Economics, Elsevier, vol. 141(1), pages 414-424.

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