Inventory planning in livestock management

This research applies quantitative approach for the development of inventory policy, addressing livestock management. The inventory policy targets raw supply in time for the livestock management. Simultaneously such policy has to respect a decrease of the costs, which are encountered for the implementation of the inventory tasks. This research derives analytical model for minimization of the costs of inventory set up requests and the holding costs during the stay of raw materials in warehouses. Optimization problem is derived, which solutions define the amount of inventory and the point, when a new order has to be placed. The added value of this problem is its explicit probabilistic constraint considering the stochastic nature of the demands. Thus, the inventory policy is defined to minimize simultaneously the costs for making orders and the holding costs for the received materials. This optimization is subject to a stochastic constraint, originated by the non-deterministic nature of the livestock demand. Numerical simulations and graphical interpretations illustrate the new derived inventory policy.