• INVENTORY SYSTEM WITH RANDOM ARRIVAL OF SHIPMENTS TO MAXIMISE THE REVENUE

Abstract

In single period inventory models, neither excess demand nor excess inventory can be carried forward to the next period. In stochastic multi period models, an order is placed at some point of time during the cycle. At the time an order is placed, the amount of inventory which will be on hand when replenishment arrives is unknown. In this paper, we propose a variation of these models to determine the optimal economic order quantity without using lost sales. Shipments arrive according to a Poisson process. The status of the inventory becomes known at the time of the arrival of the shipment, and the selection of order quantity is made at that time. However the arrival time of future shipments is uncertain.