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Algorithm for Determining the Economic Purchase Size in the Conditions of the Demand Volatility


Oleg Kosorukov, Sergey Maslov and Olga Sviridova
Abstract

An inventory management model, namely the model of determining the economic purchase size with consideration of the demand uncertainty, is presented in the article. The criterion of minimizing cumulative costs is used as a criterion of efficiency; it takes into account the excess inventory costs and the out-of-stock costs. Being one of the most applicable in the conditions of insufficient statistical data, the triangular distribution is considered as a random demand distribution law. The model allows optimizing the supply volume while minimizing risks.

Volume 12 | 05-Special Issue

Pages: 1129-1138

DOI: 10.5373/JARDCS/V12SP5/20201866