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Optimal policy for a two-stage assembly system under random demand. (English) Zbl 0601.90042
This paper considers an inventory system in which an end product is assembled from two components, each of which is ordered from an external supplier. Only the end product has final demand, which is assumed to be random. Using the functional equation approach of dynamic programming, we characterize the forms of both the optimal order policy for the components and the optimal assembly policy of the end product for a multiperiod problem for arbitrary, but finite length.
Reviewer: D.Kalin

90B05 Inventory, storage, reservoirs
90C90 Applications of mathematical programming
90C39 Dynamic programming
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