Inventory management: (r,S) inventory policy
with normally distributed period demand
A periodic review (r,S) inventory policy with normal-distributed period
demands subject to a ß-service level is considered. The lead time is
assumed fixed with value E{L}. The order cycle r is computed independently
from S with the help of the economic order quantity formula:
Symbole:
| r |
order cycle (review period) |
| S |
reorder level |
| E{D} |
expected demand per period |
| E{L} |
lead time |
| E{Y} |
expected demand during lead time |
| V{Y} |
variance of the demand during lead time |
| E{Z} |
expected demand during (lead time + review period) |
| V{Z} |
variance of
the demand during (lead time + review period) |
Assumptions:
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