A new model for the strategic management of inventories subject to peaks in market demand

Abstract

This research work is aimed at analysing a production system under dynamic conditions. The focus is on determining the strategic inventory, defined as the minimum initial inventory level needed to fulfil a sudden peak of finished products demand, as well as the minimum allowed lapse of time between two consecutive peaks to avoid stockout. A background of theoretical results and a comprehensive survey of the literature are provided, structured through a classification framework. Furthermore a new model has been developed which explicitly considers production capacity limits. It actually represents the only nonlinear model throughout the research body of knowledge in this field and, at the same time, it is characterised by an outstanding level of simplicity, which allows theoretical results in a closed analytic form, on behalf of the implementation in real-life manufacturing environments.