Inventory models with leadtime

Abstract

In the present, it can be said that one of the most important tasks of the operations management is to ensure a safety-stock level. This is so, because firm profit margins and customer satisfaction levels are both influenced by the decisions of the operations management. In theory, this issue is addressed by considering operations research. In fact this dissertation explores different inventory models with leadtime being one of the input parameters. Initially, inventory models will be categorised according to the inventory type. These include: (a) Demand, (b) Leadtime, (c) Horizon, (d) Products, (e) Capacity and (f) Service. Afterwards, a number of inventory models will be classified as deterministic leadtime models and stochastic leadtime models, and their respective theoretical results will be derived. Finally, by considering the theory about these various models, together with a current inventory problem at a local company, candidate models to solve this issue will be selected. Then, the optimal model or models will be chosen and used to find the optimal inventory policy.