8
votes
Which EOQ-based $(r,Q)$ approximation has a fixed worst-case error bound?
Only the EOQB approximation (approximation 2) has a fixed worst-case error bound. Zheng (1992) proved an error bound of $\frac18$, and Axsäter (1996) proved a stronger bound of $(\sqrt{5}-2)/2 \approx ...
- 13.1k
6
votes
Accepted
Safety stock for log-normal distribution demand
To calculate the base-stock to meet a 99% type-1 service level, we need the 0.99 fractile of the demand distribution. The safety stock level is the base-stock level minus the mean demand.
For the ...
- 13.1k
4
votes
Accepted
(Q,R) inventory policy with supplier disruptions
Yes, there are such models. On (Q,R) specifically, see Gupta (1996), Parlar (1997), Mohebbi (2003), and others.
There are many papers on other inventory models (not necessarily (Q,R)) under ...
- 13.1k
4
votes
Approaches for choosing a "risk" factor in an Inventory Optimization problem?
Here's an approach that might be close to what you are looking for. Suppose that we have $n$ products, and for each product $i$ we know:
$c_i$ = purchase cost per unit (i.e., cost to order inventory ...
- 13.1k
2
votes
Inventory Theory
I think the two ways of phrasing it are slightly different:
prevent a shortage before the delivery arrives during 95 percent of the order cycles
means that in the long run, there will be a ...
- 13.1k
2
votes
Accepted
Lead time longer than cycle time
There is no contradiction or inconsistency in having the lead time be longer than the time unit* for the model. The important thing to remember here is that the reorder point $r$ refers to the ...
- 13.1k
1
vote
inventory control for vending machine like mini store
I think you could use a simple continuous-review base-stock policy, as @LarrySnyder610 mentioned too. About the inventorying each product to minimize the lost sales, first of all, you will need to ...
- 8,505
1
vote
Safety stock calculation with production forecast variance
It sounds like you have a problem that involves three types of uncertainty:
Demand uncertainty
Lead time uncertainty
Yield uncertainty
Yield uncertainty is a somewhat general term that refers to ...
- 13.1k
1
vote
Reorder point and safety stock for very long lead times
You seem to be conflating two ordering systems. You say you will be receiving an order every 1.5 months on average. The only way that could happen with a lead time of 10 months would be if you had ...
- 37.9k
1
vote
Inventory Theory
Yes, I believe you can interpret it like this. The term service level describes it well:
Service level is the probability that the amount of inventory on hand during the lead time is sufficient to ...
- 101
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