A Comparison of Three Joint Ordering Inventory Policies*


  • Pricha Pantumsinchai

    1. Department of Management, DePaul University, 25 E. Jackson Blvd., Chicago, IL 60604–2287
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      Pricha Pantumsinchai is Assistant Professor of Operations Management in the Department of Management at DePaul University. He received his Ph.D. in industrial engineering from Illinois Institute of Technology. He has published articles in Decision Sciences, International Journal of Operations and Production Management, and others. His current research interests are in inventory management, forecasting, and productiong planning and control. Dr. Pantumsinchai is a member of the Decision Sciences Institute, POMS, TIMS, ORSA, ASQC, and is a certified member of APICS.

  • *

    The author is grateful to Professor Nick Thomopoulos for helpful comments and discussions, to Patrick Assoud for translating the paper by Renberg and Planche, and to anonymous referees for their helpful comments on an earlier draft of this paper.


This paper evaluates the performance of a joint ordering inventory policy which was first suggested and characterized by Renberg and Planche [14]. This paper shows that the policy is easily characterized for Poisson demands. This policy is then compared with two other joint ordering policies—the well-known (S, c, s) or can-order policy of Balintfy [3] and the recent periodic policies suggested by Atkins and lyogun [2]. For a continuous review operating environment, the Renberg and Planche policy utilizes a group reorder point and a combined order quantity (Q), with each item maintaining an order-up-to level (S). For the can-order policy, each item in the product group has a must-order point (s), a can-order point (c) and an order-up-to level (S). The periodic policies require that item orders be grouped at some fixed scheduled intervals. Using long-run total average costs as the basis, it is shown that no one policy is superior to the others in all the examples tested. In some cases, the Renberg and Planche policy performs surprisingly well.