Optimization of Inventory Management Logistic Model of the Machine-Building Enterprises

 

Abstract

The aim of this study is to develop the inventory management model based on Economic Order Quantity model using asymptotic perturbation methods. The simple asymptotic formulas for the “perturbed” order quantity has been obtained when cost per order, storage cost and product demand change slightly. As the results show, the total costs, which correspond to “perturbed” order quantities, are less than ones at economic order quantity. Decrease of logistics costs can improve the market competitiveness of the machine-building enterprises’ products. Modeling the nature of cost increase and demand fluctuation using asymptotic formulas the machine-building enterprises will be able to make prompt adjustments to optimize logistics processes.

Keywords: Logistic model, asymptotic methods, small parameter, asymptotic expansions

Jel Codes: С59, M11, M20

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