ANALYSIS OF A (Q,R,T) INVENTORY POLICY WITH DETERMINISTIC AND RANDOM YIELDS WHEN FUTURE-SUPPLY IS UNCERTAIN

This paper considers a stochastic inventory model where the quantity o rdered sometimes may not be available due to strikes, etc. We represen t the supplier's availability process as a two-state continuous time M arkov chain where one state corresponds to availability and the other state corresponds to unavailability of the supplier. The problem is to determine the reorder point, the order quantity when the system is fo und in ON state, and how long to wait before the next order if system is in OFF state. It is assumed that the state of the system is identif ied at a cost. Using the renewal reward theorem we construct the objec tive function as the long-run average cost. Numerical sensitivity anal ysis results are provided. We also analyze the problem when the yield (i.e., amount received, if available) is random,and discuss an example with Beta distributed yield.