| Inventory exists in every stage of supply chains.One of the most important function of inventory is used as a buffer to respond to various uncertainties and inconsistencies between demand and supply processes.Along with shorter products life cycle,the consumption level is increasing and the continually change of the economic environment, the uncertainty of demand is greater.It is very difficult to exactly forecast the market demand.Although inventory holding can resolve the uncertainty in some degree,over full inventory will lead to even worse results such as capital shortage etc.,especially in a multi-cycle decision-making situation.While the social is developing and the economic environment is changing every moment,it is unsuitable to ignore the time value of the capital,which increases the risk of holding too much inventory.It is much hard to make a good decision using average cost model because it doesn't consider the opportunity cost of the capital investment in inventory.For the reasons above all,a multi-period net present value inventory model considering risk preference is proposed.In case of uniformly distributed demand,the optimal target inventory level is obtained.The paper investigates three models:allowed shortage,not allowed shortage and price discount.The results show that the method with net present value is feasible in practice and some suggestions to the decision-maker are given. |
