On improving replenishment policies for linear trend in demand

Abstract

Donaldson's paper [ 1] on determining the replenishment policy for an item under conditions of linear trend in demand generated considerable interest among researchers [ 2 8]. The computations involved in determining the optimal inventory policy pressed researchers into developing good heuristic methods. Silver [2] was the first to suggest a heuristic method for determining economic replenishment intervals. He solved two examples by his method and by the analytical method suggested by Donaldson [1]. The first example which Silver solved was given by Donaldson in his paper, while the second example was Silver's own. Practically all authors proposing heuristic methods have solved and compared the performance of various heuristic methods using these problems as test problems. In both the test problems, the inventory policy is required over the time interval O-H. The methods require computing n replenishment intervals satisfying the condition