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The Dynamic Programming Models for Inventory Control System with Time-varying Demand

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  • Truong Hong Trinh

Abstract

The concept of dependent and independent demand is important in inventory planning and replenishment that also requires different inventory control solutions. This paper employs the dynamic programming technique for inventory control system with time-varying demand to propose the replenishment policy in terms of the economic order quantity, number of replenishment, and reorder point where total inventory cost is minimized. The study result indicates that the dynamic programming models outperform the traditional lot sizing models in terms of total inventory cost. Moreover, the paper creates opportunities for extending further researches on dynamic inventory related to capacity constraints and uncertainty conditions of demand, yield, lead time.

Suggested Citation

  • Truong Hong Trinh, 2017. "The Dynamic Programming Models for Inventory Control System with Time-varying Demand," Business and Economic Research, Macrothink Institute, vol. 7(1), pages 128-138, June.
    • Handle: RePEc:mth:ber888:v:7:y:2017:i:1:p:128-138
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    References listed on IDEAS

    as
    1. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    2. Stefan Voß & David L. Woodruff, 2006. "Introduction to Computational Optimization Models for Production Planning in a Supply Chain," Springer Books, Springer, edition 0, number 978-3-540-29879-3, June.
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    More about this item

    Keywords

    Dynamic inventory; Lot sizing; Order point system; Material requirement planning; Dynamic programming model; Inventory control system;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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