An Optimal Inventory Control Model for a Supply Chain With Shortage Constraints
To meet the needs of customers timely, businesses must maintain higher inventory levels to avoid shortages. However, high inventory levels are often associated with high inventory costs, many companies strive to reduce production or lead time cycle, and thus have a corresponding reduction in inventory. The paper on lead time and inventory decisions mostly focused on individual enterprises. Liao, C.J., and Shyu, C.H.(1992), for the perpetual inventory system, divided the activities such as the procurement, order processing, production, transportation, storage test, of the lead time period into n-independent component parts and each part has its own different time limit as well as operating costs, to analyze the best lead time and reorder point.