Another heuristic for minimizing total average cycle stock subject to practical constraints

Abstract

This paper considers the setting of reorder intervals of a population of items for minimizing the total average cycle stock subject to a limit on the total number of replenishments per unit time, and a restricted set of possible intervals. Silver and Moon have investigated the problem with the use of dynamic programming, and they also proposed a heuristic for solving it. This paper presents a new 0-1 linear programming approach to the problem. Based upon the solution of the relaxed 0-1 linear programming formulation, a simple heuristic is proposed to solve the reorder problem. Limited numerical results using realistic test examples indicate that the new heuristic performed very well for each example.