Optimal allocation of storage space

Two versions of a product are to be stored in a facility of given capacity. The (complementary) probabilities with which the two products are demanded are known. It will be demonstrated how storage space is to be allocated to make the supply (of both versions) last through a maximum number of consec...

Full description

Saved in:
Bibliographic Details
Published in:European journal of operational research 1991-11, Vol.55 (1), p.82-90
Main Authors: Sagan, Hans, Bishir, John W.
Format: Article
Language:English
Subjects:
absorbing Markov chain
Applied sciences
Exact sciences and technology
Inventory control, production control. Distribution
Inventory management
Markov analysis
Mathematical models
Operational research and scientific management
Operational research. Management science
Operations research
Optimal
Optimal inventory ratios
partial difference equations
Statistical analysis
Storage
Studies
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Two versions of a product are to be stored in a facility of given capacity. The (complementary) probabilities with which the two products are demanded are known. It will be demonstrated how storage space is to be allocated to make the supply (of both versions) last through a maximum number of consecutive orders by developing an algorithm for maximizing the solution of a non-homogeneous linear partial difference equation of second order with homogeneous boundary conditions. It will develop that for small storage facilities, the ratio of the optimal numbers of assigned storage spaces for the two versions can deviate considerably from the ratio of the corresponding demand probabilities. However, this ratio will approach the ratio of demand probabilities as the number of available storage spaces tends to infinity.
ISSN:0377-2217
1872-6860
DOI:10.1016/0377-2217(91)90193-Y