Integrated inventory decision support system with backorders and controllable lead time

Tien-Yu Huang

Ming-Feng Yang

Department of Information Management

Yu Da College of Business

Hseh-fu Rd., Tanwen Village

Chaochiao Township, Miaoli County, 361

Taiwan, R.O.C.

Abstract

This study focuses on the impact of combining the decision support system and the learning curve effects on set up cost for the continuous review integrated inventory model involving controllable lead time, ordering cost, and backorders. The objective is to establish a decision support system with integrated inventory model to minimize the joint total expected inventory cost by simultaneously optimizing ordering quantity, ordering cost, the number of lots delivered from vendor to buyer, safety factor, lead time, and backorder discount. Because the reduction of inventory cost plays an important role in production management, this research builds a decision support system to deal with the integrated inventory model. In the decision support system concerning about the inventory model, we take both the vendor and the buyer into account and help the decision maker to make decisions.

Keywords and phrases : Decision support system, integrated inventory model, backorders.