A COMPARISON OF 3 JOINT ORDERING INVENTORY POLICIES

This paper evaluates the performance of a joint ordering inventory policy which was first suggested and characterized by Renberg and Planche [14]. This paper shows that the policy is easily characterized for Poisson demands. This policy is then compared with two other joint ordering policies-the well-known (S,c,s) or can-order policy of Balintfy [3] and the recent periodic policies suggested by Atkins and Iyogun [2]. For a continuous review operating environment, the Renberg and Planche policy utilizes a group reorder point and a combined order quantity (Q), with each item maintaining an order-up-to level (S). For the can-order policy, each item in the product group has a must-order point (s), a can-order point (c) and an order-up-to level (S). The periodic policies require that item orders be grouped at some fixed scheduled intervals. Using long-run total average costs as the basis, it is shown that no one policy is superior to the others in all the examples tested. In some cases, the Renberg and Planche policy performs surprisingly well.