Optimizing monitoring time in a continuous-review cyclic inventory system

This paper discusses a mathematical model for controlling amonitoring time by a sensing device in a continuous-review cyclicinventory system. The level of the inventory is monitored bythe sensor for a continuous period, whether the stock runs outor not. First, we consider the case where the lifetime of commoditiesis finite. It is shown that, under certain conditions, thereexists a finite and unique optimal monitoring time minimizingthe long-run average cost. Secondly, we discuss the case wherethe lifetime is infinite, with an appropriately modified restockingpolicy, and obtain an equation for the optimal monitoring timeunder milder conditions. Finally, some numerical examples arepresented, and sensitivity analyses for the optimal policiesare carried out.