@MISC{Sinha_anote, author = {Pritibhushan Sinha}, title = {A Note on a Bernoulli Demand Inventory Model}, year = {} }

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Abstract

In this paper we present a single-item, continuous monitoring inventory model with probabilistic demand for the item and probabilistic lead time of order replenishment. It is assumed that demand follows Bernoulli distribution and an order is placed after stock becomes zero. The model is amenable to exact analysis and the optimal order quantity has a closed-form solution. Also, it is shown that this solution is the basic deterministic economic order quantity formula applied with average demand rate, if it is further assumed that the lead time is zero. Cost of an optimal solution of the model may be used as an upper bound for the same of some other more general policies.