Inventory management: (s,S) inventory policy with normally distributed
period demand
The parameters of a (s,S) inventory policy with periodic (daily) review under
normal distributed demand subject to a ß-service level constraint are computed.
In a first step, Schneider's simple approximation is used. In a second step,
the procedure proposed by Tijms and Groenevelt (1984) is applied. The difference
(S-s) may be entered or computed with the help of the economic order quantity
formula.
Symbole:
| E{D} |
expected demand per period |
| E{L} |
lead time |
| E{Y} |
expected demand during lead time |
| E{U} |
expected undershoot |
| V{Y} |
variance of the demand during lead time |
| s |
reorder point |
| S |
reorder level |
Assumptions:
The optimal values of s and S are directly transferred to the module for the
simulation simulation
of a (s,S) inventory policy.
Literature:
- Tempelmeier (2006)
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