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Lead time plays an important role and has been a topic of interest for many authors in inventory management. The length of lead time directly affects the size of order quantity, the service level for customer, and the competitive ability in business. Almost all inventory models assume that lead time is a prescribed constant or a stochastic variable. But in many real situations, lead time can be reduced at an added crashing cost; in other words, it is controllable. Therefore, many firms felt doubtful about the uncontrollability of lead time. In addition, for the traditional inventory models, many researchers studied the (Q,r) inventory model which considers the case that all demand during the stockout period is either backordered or lost sales. In practical market situations, some customers maintain the loyalty and trust for specific supplier though it has many competitors, and the customers are also willing to wait whenever a shortage occurs. Hence, the total amount of stockout during the stockout period is worth to be considered a mixture of backorders and lost sales. This paper focuses on the controllable lead time and presents six mathematical inventory models, in which both lead time and order quantity are the decision variables. In addition, during the stockout period, the total amount of stockout considers a mixture of backorders and lost sales to obtain the optimal solution. In this thesis, we first assume that the demand of lead time follows normal distribution and the lead time consists of n components which have different normal durations, minimum durations and crashing costs. The objective is to determine the optimal lead time and the order quantity pair so as to minimize the expected total cost which is composed of the ordering cost, the expected carrying cost, the expected shortage cost and the crashing cost. Second, we assume that the distribution of lead time demand is free. This model is an extended model of the previous inventory model. We consider the cumulative distribution function of the lead time demand which has only known mean and variance, but make no assumption on the distributional form, and try to apply the minimax distribution free approach criterion to find out the optimal solution. Next, we discuss the mixture inventory model with a service level constraint. In many practical problems, the stockout cost includes: the penalty of contract, the damage of goodwill, loss of goodwill for customer, the reduced potential of the future demand, and so on. Since it is difficult to estimate an exact value of the stockout cost, we try to replace the stockout cost in the objective function by the service level constraint. The service level constraint here indicates that the stockout level per cycle is bounded. Finally, we discuss an arrival order which contains some defective units in mixture inventory model. Traditionally, inventory models almost assume that an arrival order has no defective units. In fact, this is impossible. As a result of imperfect production of the supplier, and/or damage in transit, an arrival order often contains some defective units. If there are defective units in orders, there will be impact on the on-hand inventory level, the number of shortage and the frequency of orders in inventory system. Therefore, ordering policies determined by conventional inventory models may be inappropriate for the defective inventory situation. Hence, in this situation, we change the previous inventory models and assume that an arrival order may contain some defective units. And the number of defective units in an arrival order is a random variable with binomial probability distribution. We also assume that the purchaser inspects the entire items which are assumed to be non- destructive, and the defective units in each lot which can not be repaired will be returned to the vendor at the time of delivery of the next lot. In all mathematical inventory models, we discuss the effects of parameters and give economic interpretation of the circumstances.
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