CHANGING THE GIVENS IN MODELING INVENTORY PROBLEMS - THE EXAMPLE OF JUST-IN-TIME SYSTEMS

Most of the mathematical models of inventory problems, appearing in the literature, have had a rather narrow focus. Specifically, optimal solutions have been developed for mathematically stated problems, each typically subject to a number of so-called "givens". As an example, the economic order quantity is the optimal replenishment size under a set of assumptions, including a given fixed cost per replenishment. The thesis, conveyed in this paper, is that often performance can be improved far more by changing one of the givens, without any optimization, rather than by optimizing subject to the given set of conditions. Two examples from Just-in-Time systems are used to illustrate this concept.