An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity

Studying the inventory management literature regarding the models with controllable lead time, many researchers have assumed the random demand follows the normal distribution. However, in practice, it is observed that an accurate demand distribution is often skewed to the right for many items and fi...

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Autores principales:	Aref Gholami, Abolfazl Mirzazadeh
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2018
Materias:	inventory management log-normal distribution gamma/erlang distribution lead time ordering cost capacity Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/83ff01af49e943258be34ee8d6436bcc
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spelling	oai:doaj.org-article:83ff01af49e943258be34ee8d6436bcc2021-12-02T14:35:48ZAn inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity2331-197510.1080/23311975.2018.1469182https://doaj.org/article/83ff01af49e943258be34ee8d6436bcc2018-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2018.1469182https://doaj.org/toc/2331-1975Studying the inventory management literature regarding the models with controllable lead time, many researchers have assumed the random demand follows the normal distribution. However, in practice, it is observed that an accurate demand distribution is often skewed to the right for many items and fitting the normal distribution to the random demand may cause a great financial loss for an inventory/production system. Hence, the motivation of this study is to design a mathematical model where the demand follows the log-normal distribution. Also in order to expand upon previous research concerning the random available capacity, we assume that the random capacity follows a gamma-type distribution to cover a wide range of distribution shapes. Moreover, we consider the ordering cost is a deterministic variable and it is reduced by an extra investment. Also, to find an optimal policy of the proposed probabilistic mathematical model, a solution algorithm is established and a numerical example is proposed showing that utilizing the proposed model rather than the standard continuous-review model with the normal demand may reduce the total expected cost more than 20%.Aref GholamiAbolfazl MirzazadehTaylor & Francis Grouparticleinventory managementlog-normal distributiongamma/erlang distributionlead timeordering costcapacityBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 5, Iss 1 (2018)
institution	DOAJ
collection	DOAJ
language	EN
topic	inventory management log-normal distribution gamma/erlang distribution lead time ordering cost capacity Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	inventory management log-normal distribution gamma/erlang distribution lead time ordering cost capacity Business HF5001-6182 Management. Industrial management HD28-70 Aref Gholami Abolfazl Mirzazadeh An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
description	Studying the inventory management literature regarding the models with controllable lead time, many researchers have assumed the random demand follows the normal distribution. However, in practice, it is observed that an accurate demand distribution is often skewed to the right for many items and fitting the normal distribution to the random demand may cause a great financial loss for an inventory/production system. Hence, the motivation of this study is to design a mathematical model where the demand follows the log-normal distribution. Also in order to expand upon previous research concerning the random available capacity, we assume that the random capacity follows a gamma-type distribution to cover a wide range of distribution shapes. Moreover, we consider the ordering cost is a deterministic variable and it is reduced by an extra investment. Also, to find an optimal policy of the proposed probabilistic mathematical model, a solution algorithm is established and a numerical example is proposed showing that utilizing the proposed model rather than the standard continuous-review model with the normal demand may reduce the total expected cost more than 20%.
format	article
author	Aref Gholami Abolfazl Mirzazadeh
author_facet	Aref Gholami Abolfazl Mirzazadeh
author_sort	Aref Gholami
title	An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
title_short	An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
title_full	An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
title_fullStr	An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
title_full_unstemmed	An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
title_sort	inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity
publisher	Taylor & Francis Group
publishDate	2018
url	https://doaj.org/article/83ff01af49e943258be34ee8d6436bcc
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An inventory model with controllable lead time and ordering cost, log-normal-distributed demand, and gamma-distributed available capacity

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