Solution Techniques for Inventory Replenishment Policies with Linear Demand Trend

  • M. T. Tabucanon
  • M. V. Farahani
Conference paper


Four inventory replenishment policies namely: Analytical, Silver-Meal Heuristic, Alternative Heuristic and Modified EBQ are compared for the case of deterministic linearly increasing demand. Using hypothetical example, for each policy, cost penalties of ordering earlier and later than optimal replenishment times are calculated. A wide range of values for slope of demand, inventory replenishment and holding costs are considered. Shortcomings of each policy is discussed. For the case of linearly decreasing demand a new policy based on Modified EBQ is developed and compared with analytical method. Within the considered wide range of values for relevant cost and demand pattern parameters, EBQ method suitably modified for linear trend has shown very good performance.


Cost Penalty Spare Part Demand Pattern Average Demand Initial Increase 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. [1]
    Brosseau, L.J.A., An Inventory Replenishment Policy for the case of a Linear Decreasing Trend in Demand, INFOR, Vol.. 20, No. 3, August 1982, 252–257.Google Scholar
  2. [2]
    Buchanan, J.T., Alternative Solution Method for the Inventory Replenishment Problem Under Increasing Demand, J. Opl. Res. Soc., 31 (1980), 616–620.Google Scholar
  3. [3]
    Diegel, A., Economic Lots Under Linearly Changing Consumption: with Tables, unpublished DNA thesis, School of Business Administration, University of Oregon, Portland.Google Scholar
  4. [4]
    Donaldson, W.A., Inventory Replenishment Policy for a Linear Trend in Demand–An Analytical Solution, Opl. Res. Q., 1977, Vol. 28, 3, 663–670.CrossRefGoogle Scholar
  5. [5]
    Kotler, P., Marketing Management* Analysis, Planning, and Control, ( Fifth edition, Prentice Hall International Edition, London, 1984 ), 358.Google Scholar
  6. [6]
    Ritchie, E., Practical Inventory Replenishment Policies for a Linear Trend in Demand followed by a Period of Steady Demand, J. Opl. Res. Soc., 31 (1980), 605–613.Google Scholar
  7. [7]
    Silver, E.A., A Simple Inventory Replenishment Decision Rule for a Linear Trend in Demand, J. Opl. Res. Soc., 30 (1980), 71–75Google Scholar
  8. [8]
    Silver, E.A., Vidal, R., Victor, V., and Werra, D., A Tutorial on Heuristic Methods, European Journal of Operational Research, 5 (1980), 153–162CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 1985

Authors and Affiliations

  • M. T. Tabucanon
    • 1
  • M. V. Farahani
    • 1
  1. 1.Division of Industrial Engineering and ManagementAsian Institute of TechnologyBangkokThailand

Personalised recommendations