On a Heuristic Inventory-replenishment Rule for Items with a Linearly Increasing Demand Incorporating Shortages

Abstract

A heuristic decision rule is derived for the replenishment of items with a linearly increasing demand rate over a finite planning horizon during which shortages are allowed. When compared with the exact decision rule, the heuristic is found to incur negligible cost penalty for the numerical example which is given to illustrate the use of the heuristic.

Keywords:

• heuristic
• inventory
• linearly increasing demand
• shortage