On the Accuracy of Fluid Approximations to a Class of Inventory-Level-Dependent EOQ and EPQ Models
Joint Authors
Source
Advances in Operations Research
Issue
Vol. 2011, Issue 2011 (31 Dec. 2011), pp.1-23, 23 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2011-06-18
Country of Publication
Egypt
No. of Pages
23
Main Subjects
Information Technology and Computer Science
Abstract EN
Deterministic Economic Order Quantity (EOQ) models have been studied intensively in the literature, where the demand process is described by an ordinary differential equation, and the objective is to obtain an EOQ, which minimizes the total cost per unit time.
The total cost per unit time consists of a “discrete” part, the setup cost, which is incurred at the time of ordering, and a “continuous” part, the holding cost, which is continuously accumulated over time.
Quite formally, such deterministic EOQ models can be viewed as fluid approximations to the corresponding stochastic EOQ models, where the demand process is taken as a stochastic jump process.
Suppose now an EOQ is obtained from a deterministic model.
The question is how well does this quantity work in the corresponding stochastic model.
In the present paper we justify a translation of EOQs obtained from deterministic models, under which the resulting order quantities are asymptotically optimal for the stochastic models, by showing that the difference between the performance measures and the optimal values converges to zero with respect to a scaling parameter.
Moreover, we provide an estimate for the rate of convergence.
The same issue regarding specific Economic Production Quantity (EPQ) models is studied, too.
American Psychological Association (APA)
Piunovskiy, Alexey& Zhang, Yi. 2011. On the Accuracy of Fluid Approximations to a Class of Inventory-Level-Dependent EOQ and EPQ Models. Advances in Operations Research،Vol. 2011, no. 2011, pp.1-23.
https://search.emarefa.net/detail/BIM-461575
Modern Language Association (MLA)
Piunovskiy, Alexey& Zhang, Yi. On the Accuracy of Fluid Approximations to a Class of Inventory-Level-Dependent EOQ and EPQ Models. Advances in Operations Research No. 2011 (2011), pp.1-23.
https://search.emarefa.net/detail/BIM-461575
American Medical Association (AMA)
Piunovskiy, Alexey& Zhang, Yi. On the Accuracy of Fluid Approximations to a Class of Inventory-Level-Dependent EOQ and EPQ Models. Advances in Operations Research. 2011. Vol. 2011, no. 2011, pp.1-23.
https://search.emarefa.net/detail/BIM-461575
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-461575