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Mathematical Problems in Engineering
Volume 2014, Article ID 986498, 9 pages
Research Article

An Optimization of Inventory Policy Based on Health Care Apparel Products with Compound Poisson Demands

1Institute of Business Administration, Shanghai Finance University, Shanghai 201209, China
2Business Division, Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

Received 28 January 2014; Revised 20 April 2014; Accepted 17 June 2014; Published 28 September 2014

Academic Editor: Pui-Sze Chow

Copyright © 2014 An Pan et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


Addressing the problems of a health care center which produces tailor-made clothes for specific people, the paper proposes a single product continuous review model and establishes an optimal policy for the center based on control policy to minimize expected average cost on an order cycle. A generic mathematical model to compute cost on real-time inventory level is developed to generate optimal order quantity under stochastic stock variation. The customer demands are described as compound Poisson process. Comparisons on cost between optimization method and experience-based decision on are made through numerical studies conducted for the inventory system of the center.