The production and inventory systems taking account of time value

This paper discusses the optimal inventory policies taking account of time value by applying the concept of the present value method, and answers all open questions mentioned in Chung (Production Planning & Control, 1996, 7, 264- 267). A simple algorithm to compute the optimal ordering time interval is developed to improve Chung's paper. Numerical examples reveal that the solution algorithm described in this paper is accurate and rapid.

Keywords:

• Deterministic Inventory Models
• Present Value
• Instantaneous Interest Rate
• Optimization