Strategic capacity planning using stock control model

Abstract

The use of stoek management model allows identifying the type of optimal strategy of production capacities. Namely, the optimal strategy of development for the infinite planning period is determined by two values s and S The development of capacities takes places only when the level of stocks decreases to the critical level s and the stocks are replenished up to the level S. In the case of a finite planning period, the optimal strategy of replenishing of stocks depends on the initial level of stocks and is determined by the set of pairs [s, S], i.e., the planning period of each year has its own critical level of stocks [s] and the level [S], up to which the stocks are replenished.