Inventory Policy with Variable Lead Time under Combined Discount Scheme

To effectively analyze inventory policy with stochastic demand,transportation and purchasing considerations are integrated with continuous review inventory model with variable lead time,in which the lot size,lead time and reorder point are decision variables.In addition,procedures are developed to solve the proposed models.Numerical experiments are also performed to compare the inventory policy considering transportation and that without considering transportation as well as explore the effect of key parameters on lot size,reorder point and expected total cost.The significant improvement is achieved when using the proposed models.