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A dynamic inventory system with recycling

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  • Morris A. Cohen
  • William P. Pierskalla
  • Steven Nahmias

Abstract

This paper deals with a periodic review inventory system in which a constant proportion of stock issued to meet demand each period feeds back into the inventory after a fixed number of periods. Various applications of the model are discussed, including blood bank management and the control of reparable item inventories. We assume that on hand inventory is subject to proportional decay. Demands in successive periods are assumed to be independent identically distributed random variables. The functional equation defining an optimal policy is formulated and a myopic base stock approximation is developed. This myopic policy is shown to be optimal for the case where the feedback delay is equal to one period. Both cost and ordering decision comparisons for optimal and myopic policies are carried out numerically for a delay time of two periods over a wide range of input parameter values.

Suggested Citation

  • Morris A. Cohen & William P. Pierskalla & Steven Nahmias, 1980. "A dynamic inventory system with recycling," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 27(2), pages 289-296, June.
    • Handle: RePEc:wly:navlog:v:27:y:1980:i:2:p:289-296
    DOI: 10.1002/nav.3800270212
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    Cited by:

    1. Lin, Yizhong & Leung, Janny M.Y. & Zhang, Lianmin & Gu, Jia-Wen, 2020. "Single-item repairable inventory system with stochastic new and warranty demands," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    2. Gökbayrak, Esra & Kayış, Enis, 2023. "Single item periodic review inventory control with sales dependent stochastic return flows," International Journal of Production Economics, Elsevier, vol. 255(C).
    3. Tomoaki Yamazaki & Keisuke Shida & Takashi Kanazawa, 2016. "An approach to establishing a method for calculating inventory," International Journal of Production Research, Taylor & Francis Journals, vol. 54(8), pages 2320-2331, April.
    4. Ki Ling Cheung & Alex X. Zhang, 1999. "The impact of inventory information distortion due to customer order cancellations," Naval Research Logistics (NRL), John Wiley & Sons, vol. 46(2), pages 213-231, March.

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