POM Inventory Management Optimal order quantity assuming the component part quantity is a random variable.
| Optimal order quantity assuming the component part quantity is a random variable. |
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Optimal order quantity assuming the component part quantity is a random variable.
Robert B. Allen, Stuart Graduate School of Business, Illinois Institute of Technology,
Nick T. Thomopoulos, Stuart Graduate School of Business, Illinois Institute of Technology,
IM 27
Abstract
This paper shows how to estimate the optimal order quantity for unique batch assemblies given that the component part quantity is a random variable.
The population consists of customer specified, dated assemblies with unique composition and application. The probability model assumes that the quantity of the component parts is a random variable.
This model uses four unknown parameters that are needed to estimate the optimal order quantity. The results demonstrate methods of parametric analysis for evaluation of management intervention effectiveness.
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