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A discrete approach to designing optimal hedging-point control policies for production-inventory systems with general stochastic behavior

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Abstract

The hedging-point policy for a production-inventory system is investigated under the effect of probabilistic machine breakdowns and repairs assuming general discrete distributions for the repair time and the time to failure. Using a methodology whereby inventory levels can assume only discrete values, an optimal safety stock size that minimizes the total expected cost per unit time is determined.

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Correspondence to B. N. Khoury.

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Khoury, B.N. A discrete approach to designing optimal hedging-point control policies for production-inventory systems with general stochastic behavior. Comput Manag Sci 6, 399–409 (2009). https://doi.org/10.1007/s10287-007-0063-y

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  • DOI: https://doi.org/10.1007/s10287-007-0063-y

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