Showing papers by "Kamran Moinzadeh published in 1993"

An Inventory Model of Immediate and Delayed Delivery

Abstract: This paper considers the long run, profit maximizing strategy of a distributor that holds a good good 1 in inventory for immediate delivery and that offers a second good good 2 for delayed delivery. When the two goods are substitutes, an out-of-stock situation for good 1 will cause some consumers "walkers" to seek the good elsewhere, other consumers "waiters" to accept a raincheck for later delivery of good 1, and others still "switchers" to place an order for good 2. It is shown that a profit maximizing strategy may entail setting a price for the delayed delivery item so as to encourage switching behavior. The rationale is that the distributor can hold a smaller inventory, thereby incurring lower holding costs, because out-of-stock situations are less costly than they would be without some consumers being willing to switch.

On the use of buffer inventories to minimize costs with an unreliable machine

Abstract: In this paper, we discuss the problem of quality control with an unreliable machine which produces defects at a rate of Λ0, per unit when in-control and a rate of Lambda; 1, when out-of-control (where Λ1 Λ 0). Every h time periods, we sample n units, count the number of defects, and (using a process based on a Shewart c-chart) test the hypothesis that the machine is in control by comparing the total number of defects to an upper control limit (UCL). More important, we introduce the concept that a buffer inventory which immediately follows the unreliable machine may reduce expected total costs. This buffer serves to delay the movement of items from the unreliable machine to the next stage of the production process. In this way, we can isolate and repair most defective items before they are embedded in a product downstream or sold to customers where repair is more costly. To search for the optimal control policy, we find bounds for n, h, and UCL; given values for these variables, we show how the optimal buf...