Questions tagged [rq-inventory-model]

For questions related to the (r,Q) inventory model, in which stochastic demands reduce the inventory level over time, and when the inventory position reaches the reorder point (r), an order is placed of size Q.

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1 answer
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Approaches for choosing a "risk" factor in an Inventory Optimization problem?

I'm working on an Inventory Optimization (Allocation) problem. The decision variable is the amount of inventory budget to allocate for each product, from a set of products. My objective is to ...
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8 votes
1 answer
746 views

Lead time longer than cycle time

I am trying to calculate the reorder point and safety stock for a pharmaceutical product. I am using this formula $$r = \mu_{LTD} + z_\alpha\sigma_{LTD}. $$ $$SS = z_\alpha\sigma_{LTD}. $$ where, $$...
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5 votes
1 answer
110 views

Which EOQ-based $(r,Q)$ approximation has a fixed worst-case error bound?

There are two common approximations for the $(r,Q)$ inventory optimization problem that use the EOQ model. It is well known that one of them has a fixed worst-case error bound, but there is confusion ...
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5 votes
1 answer
524 views

Safety stock for log-normal distribution demand

I came across this example on how to model your lead time demand as a log-normal distribution and calculate the safety stock. https://www.linkedin.com/pulse/why-you-keep-missing-your-service-level-...
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4 votes
1 answer
57 views

(Q,R) inventory policy with supplier disruptions

I am trying to understand the (Q,R) inventory policy with a type 1 service level and demand and lead time modelled as normal distributions. As far as I have understood, the assumption is that the ...
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3 votes
2 answers
179 views

Inventory Theory

I've been doing a bit of inventory theory, and just wanted to know if I could interpret: "Tim has decided to keep enough safety stock to prevent a shortage before the delivery arrives during 95 ...
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  • 149
2 votes
1 answer
98 views

inventory control for vending machine like mini store

Let's say we have a kiosk inside gas station selling cigarettes and snacks outside a supermarket. There are limited space for each product. The kiosk only allows to get restocked from the supermarket, ...
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2 votes
1 answer
111 views

Safety stock calculation with production forecast variance

I am trying to find an safety stock calculation where the expression incorporates: Lead time variance Sales demand variance & Production forecast variance My calculation so far is based on the ...
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  • 327
2 votes
1 answer
221 views

Reorder point and safety stock for very long lead times

I have previously asked this problem here-Lead time longer than cycle time, but I keep getting more confused the more I think about it. Using the Q,R inventory model, suppose my mean monthly demand $\...
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