Abstract:A buyer faced with order quantity and capacity constraints purchases a product from a supplier. A (R,Q) policy
optimization model is developed to minimize the buyer’s total expected cost per unit time between two successive orders. A
solution is proposed for the model when the demand is uniformly distributed, and thus sensitivity analysis of the resource
constraints, cost parameters and demand characteristics is performed through some numerical examples. This work optimizes
integratedly safety stock and order quantity under circumstances of stochastic demand and resource constraints, makes up
for the shortcoming of published literatures on (R,Q) policy that they acquiesce in that the optimal total purchase quantity
is the expected value of stochastic demand in a certain period and thus calculates the order cost, product cost and shortage
cost, and can provide basis for supplier selection in the above-mentioned circumstances.