Optimum Ordering Policy in a Bicomponent Inventory Model : Statistical Aspects

Abstract

ABSTRACT:

This paper considers a situation where the manufacturer of a two‐component product receives supplies of the two eomponents presumably from two different sources each supplying components of one variety. Under NBUE assumption on both the supply random variables, a strategy which maximizes the minimum expected profit in a one‐period inventory model, with uncertainty in demand, has been explored. An estimator for this maximin order quantity whenever the demand distribution is unknown has been proposed and almost sure convergence· of this estimator to its true value has been established. Further asymptotic results helpful in testing or interval estimation problems concerning the maximin order quantity have also been derived.

AMS 1980 Subject Classification: 90B05, 60F05.