Changing the Values of Parameters on Lot Size Reorder Point Model


Hung-Chi Chang




The Just-In-Time (JIT) philosophy has received a great deal of attention. Several actions such as improving quality, reducing setup cost and shortening lead time have been recognized as effective ways to achieve the underlying goal of JIT. This paper considers the partial backorders, lot size reorder point inventory system with an imperfect production process. The objective is to simultaneously optimize the lot size, reorder point, process quality, setup cost and lead time, constrained on a service level. We assume the explicit distributional form of lead time demand is unknown but the mean and standard deviation are given. The minimax distribution free approach is utilized to solve the problem and a numerical example is provided to illustrate the results.