Project procurement and disposal decisions: An inventory management model

In this paper, we develop a two-stage mathematical model to examine an impo rtant inventory management problem within a large-scale project context. Sp ecifically, we analyze the procurement and disposal of an important, expens ive item (e.g. pipeline). There is uncertainty surrounding total requiremen ts of this item during a project. Surplus stock on-hand at the conclusion o f the project may be disposed for revenue. However, it may be retained to s atisfy requirements during a subsequent project. The time between projects follows a discrete probability distribution. The key decision variables inv olve the procurement quantity in the initial project as well as the best di sposal quantity (should a surplus exist) at the conclusion of the project. (C) 2001 Elsevier Science B.V. All rights reserved.