An Extended Newsvendor Model for Solving Capacity Constraint Problems in a Multi-Item, Multi-Period Enviroment

Abstract

In the past few years, the effective management of inventory control problems has become an increasingly critical issue for supplier companies. In this paper, on the basis of the needs a major Hungarian mass production company, we present an extension of an analytical inventory control model considering the condition of global capacity constraint. In a previous paper [6] we elaborated a model regarding the one customer - one supplier relation. Our aim is to determine an optimal holding-production policy of the supplier, which makes a cost-optimum stockpiling policy possible for an arbitrary long production time. We intend to show that, on the basis of our former results, the global capacity constraint satisfying policy can be determined with a new heuristic method.