Note on inventory model with net present value

Abstract

We study the paper of Hadley to compare the order quantities for inventory models using the average annual cost and the discounted cost. The purpose of this note is threefold. First, we show that the solution for the discounted cost inventory model is exist and unique. Second, we provide a formulated approximation for the discounted cost inventory model. Third, we use our approximation to explain why two solutions by the average annual cost and the discounted cost are close each other such that the numerical analysis in Hadley’s examples to demonstrate a negligible difference between them is explained. Our findings will undoubtedly improve the theoretical base for inventory models and develop new practical application for operational research.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 17 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.