distribution-free continuous review inventory model with controllable lead time and setup cost in the presence of a service level constraint传播变为免费连续检查库存模型与可控提前期和设置成本的存在服务水平约束.pdfVIP

Hindawi Publishing Corporation Mathematical Problems in Engineering Volume 2012, Article ID 867847, 16 pages doi:10.1155/2012/867847 Research Article Distribution-Free Continuous Review Inventory Model with Controllable Lead Time and Setup Cost in the Presence of a Service Level Constraint Wei-Min MA and Bing-Bing QIU School of Economics and Management, Tongji University, Shanghai 200092, China Correspondence should be addressed to Bing-Bing QIU, qiubb2005@163.com Received 15 March 2012; Revised 3 June 2012; Accepted 4 July 2012 Academic Editor: Jun Hu Copyright q 2012 W.-M. MA and B.-B. QIU. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Based on the mean and the standard deviation of lead time demand, and also taking the difficulty in measuring shortage cost into consideration, we investigate the joint decision problem of continuous review inventory in which a service level constraint should be satisfied. Under the assumption of controllable lead time and setup cost, a mathematical programming model is established. The objective function of the proposed model is the total expected annual cost and the constraint guarantees that the service level requirement can be satisfied at the worst case. Subsequently, an equivalent nonlinear programming model is derived. By constructing Lagrange function, the analysis regarding the solution procedure is conducted, and a solution algorithm is then provided. Moreover, a numerical example is introduced to illustrate the proposed model and solution algorithm. Through sensitivity analysis, some observations and managerial implicat